CITY OF LAREDO

ANNUAL BUDGET WORKSHOP

M2006-W-005

CITY COUNCIL CHAMBERS

1110 HOUSTON STREET

LAREDO, TEXAS 78040

AUGUST 7, 2006

5:30 P.M.

I.          CALL TO ORDER

 

            With a quorum present, Mayor Raul G.  Salinas called the meeting to order.

II.        ROLL CALL

            In attendance:

 

            Raul G.  Salinas,                                                                       Mayor

            Mike Garza,                                                                             Council Member, District I

            Hector Garcia,                                                              Council Member, District II

            Michael Landeck,                                                                     Council Member, District III

            Johnny Amaya,                                                             Council Member, District IV

            Johnny Rendon,                                                                        Council Member, District V

            Gene Belmares,                                                                        Council Member, District VI

            Juan Chavez,                                                                           Council Member, District VII

            Juan Ramirez,                                                                           Mayor Pro Temp, District VIII

            Gustavo Guevara, Jr.,                                                   City Secretary

            Larry Dovalina,                                                                         City Manager

            Cynthia Collazo,                                                                       Deputy City Manager

            Horacio De Leon,                                                                     Assistant City Manager

            Rafael Garcia,                                                                           Assistant City Manager

            Jaime Flores,                                                                            City Attorney

           

III.       PLEDGE OF ALLEGIANCE

 

            Mayor Raul G.  Salinas led in the Pledge of Allegiance.

 

IV.       COMMUNICATIONS

 

V.        DISCUSSION AND POSSIBLE ACTION REGARDING THE PROPOSED FISCAL             YEAR 2006-2007 ANNUAL BUDGET.

           

            A.  Introduction of the budget by City Manager Larry Dovalina, including budget             process, vision and goals.

 

Larry Dovalina, City Manager read the following statement:

 

“I am proud to present to you a proposed balanced budget document for the 2006-2007 fiscal year.  As a native Laredoan, I share the deep pride that is evoked from the richness of a community that this year saw its 251st birthday.  When Don Tomas Sanchez, Laredo’s founder, made his place by a life-giving river in 1755, he couldn’t have imagined that in the year 2006 Laredo would be a major hub for international trade.  With an almost central location in the Northwestern Hemisphere, Laredo is poised to continue to facilitate the movement of billions of dollars of goods flowing to and from the nations that have historical significance in the global trading economy of today.  This fine fiscal and operations tool takes into account the humble roots of this community that is the first non-missionary, non-military Spanish settlement in North America.   Throughout its history, this Rio Grande pass has served as a practical point to the people that utilized it.  Today, civic leaders in both the public and private sector preserve this practice at a much higher, more technologically adept level.  City governance knows where this community began, has seen it grow and now addresses the needs of the citizens that we all so aptly serve.  This fiscal presentation incorporates the projections in revenue, debt service and expenses that will come with a growing population and expanding trade industry [market].  As I stated last year, in many ways Laredo has arrived and this is an even more exciting time than ever in terms of overall growth and port activity.  I and the members of this 2,600-person staff recognize the need for strategic investment in employee capital and community infrastructure.  Too often, public servants at our level get accused of not doing enough and not being responsive to the needs of the citizenry but, to the contrary, this government has been fully engaged in meeting the needs of this great community.

 

At a glance, the theme of this year’s budget process is based on improved customer service;  enhancements from increased police and fire presence in the community; on increased efficiency in the building permitting processes; to cross border processing enhancements at the Laredo Bridge System; to the partnerships in the public health sector created by the proactive steps taken at the Health Department; to the expansion of the Trackwise database and archives allowing for better tracking of service requests; and, to a more aggressive preventive maintenance program with signs, traffic signals and pavement markings.  While the City is improving these and other services, department directors and division managers strive to maintain their budgets with little or no growth for a fourth consecutive year.  This is a noteworthy achievement in light of the consistent increase in fuel and energy over the past two years.  This cost was the most significant increase to operations across the entire budget. 

 

This leads me to my next point.  The total Proposed Annual Operating Budget of $392,174,549 for the fiscal year 2007 for the period of October 1, 2006 through September 30, 2007 includes operating expenditures and transfers and a combined ending balance of $87,504,397. This translated to 22% of total operating expenditures and transfers, an increase of $5,436,363 over FY 2006.

 

The FY 06-07 Proposed Annual Budget maintains the current tax rate of $.637000 per $100 of assessed property valuation. 

 

A total of 2,620.91 full time equivalent positions, including vacant positions are budgeted for the FY 2006-2007 Proposed Budget.  Included in the budget is a 2% cost of living adjustment set to take effect in April 2007, an average 3% merit increase for all non-civil service or union employees and a 5% increase for the City’s contribution to the Health and Benefits fund.

 

     Mission Statement and Goals

 

As you recall, one-year ago I implemented an aggressive reorganization to bring the goals of the policy board and this administration into better focus and at the same time achieve community-need based results.  Each of the Assistant City Managers have their respective charges to enhance the quality of life and economic prosperity of Laredo.  The Deputy City Manager, aside from being the City Manager’s department director, is charged with supervising the safety, health and general welfare of the City, as well as the overall organizational infrastructure of the employee group.

Together, the team has been hard at work ensuring prosperity for the community by maximizing Laredo’s preeminent position as the largest inland trade hub in the Americas. 

While our newly elected officials may make some strategic adjustments, I think that you will all agree that the basic premise of our plan is right on target with the following goals:

 

·          Economic Prosperity - Create a trade-based economic model which fosters economic wealth.

 

·          Safety & Health - Promote an environmentally sustainable community that is the safest and healthiest in Texas with the latest technology and quality services.

 

·          Quality of Life - To be the most livable city in Texas by fostering education, promoting sustainable neighborhoods through ample cultural entertainment and adequate recreational space.

·          Organizational Infrastructure - Provide progressive organizational support by being innovative in best practices, technology, resource creation, development and allocation.

 

 

98-99

99-00

00-01

01-02

02-03

03-04

04-05

05-06

06-07

Interest & Sinking

0.188072

0.175962

0.158603

0.14048

0.145776

0.141113

0.128323

0.124816

0.124981

Maint. & Operation

0.351858

0.393256

0.417755

0.435878

0.484758

0.500648

0.508677

0.512184

0.512019

 

 

 

 

 

 

Laredo has yet to realize its full potential, but with these guideposts and a consensus by the policy board, this administration and 2,600 employees can achieve all things.  

 

    

     Economic Prosperity

 

From new rooftops, to expanded roads, to cross border traffic at greater speeds and volumes, to new hotel and retail places, Laredo is still on the move and growing with new and more small business as well as brand name expansion.

 

In 2005, 4,006 building permits were issued at a value of over $426 million dollars.  A good portion of those stats were seen in the residential sector, with nearly 1,904 permits issued for single and multi-family structures.  In the business sector, Laredo has attracted big business, and has two new movie theatres in the works; new locations of warehouses such as Hitachio Transportation,  Shiloh Junction, Storage Solutions, Averitt Express; and Bajio Enterprises; in the retail sector you have seen Petco Animal Supplies, Circuit City, Goodwill Industries, Conoco Pump and Shop, ZN Texas Plaza and Galeria Center, Lowes,  a second Target Stores, Walmart, Bank of America, Chase Bank, and First National Bank.  Restaurants and hotels include  Wendy’s, Unos Chicago-style Pizza, The Freshest, SpringHill Suites by Marriott, Best Western Hotel, Hawthorn Suites, Super 8 Motel, and the Holiday Inn along with new municipal and education facilities.  The City has added to that new building process with our own homegrown retail space at El Portal as a part of the Bridge of the Americas redesign project.

 

The area that we are most successful in, international trade is also the area where we are the most vulnerable.  Keeping this in mind, the budget tool before you contains funding measures that will maintain and subsequently keep Laredo in this position.  Cross-border trade is taking place in Laredo in greater volumes and speed than ever before.  Laredo is sustaining large economic growth.  To illustrate this point, Laredo’s Customs Revenue totaled over $171 million in 2005, maintaining its position as the #1 inland port on the U.S./Mexico border.

 

To put this figure into perspective, it helps to understand exactly how much traffic Laredo is handling.  A record amount of more than 12.9 million non-commercial vehicles headed north and south across Laredo in 2005, according to the TAMIU Center for Border Economic and Enterprise Development.  Additionally, there were close to three million commercial vehicles north and south bound alone in that same year.  Loaded rail cars also passed through Laredo in record amounts with 409,406 headed north and south in 2005.  The Laredo Bridge System processed nearly four million pedestrians headed south into Mexico and in all the port handled over eight million in 2005 alone.  Projections on these numbers show that the volume of cross border traffic is going to increase.  One major project that will come online and impact this budget is the completion and operation of the new Bridge of the America’s, International Bridge I, pedestrian and traffic processing facility.  The Bridget System will have an impact of eighteen (18) full time equivalent positions to maintain the new facility which has increased from 3,000 sq ft to 16,000 sq ft, a 433% increase.  Another fiscal year 2006-2007 project that will keep Laredo moving forward is the realized SENTRI lane on International Bridge II. This is a dedicated north-bound commuter processing lane, that will allow individuals that have applied and been pre-cleared through U.S. Customs and Border protection will also be seen in the next fiscal year.

 

The enormous amount of cross border activity is an indication of how much economic growth Laredo is sustaining.  The Laredo Development Foundation indicates that more than 700 of the Fortune 1000 companies conduct international business via Laredo.  Making the place for LDF in our sustainability even more essential; therefore, we are maintaining our funding to this organization in the Proposed FY 2006-2007 budget.  They will continue their advocacy of Laredo and promoting the Gateway City as the place to come and do business.

 

In addition, Forbes magazine in 2005 ranked Laredo number one in the category of job growth among smaller metropolitan areas (populations smaller than 345,000), as part of the magazine’s list of Best Places for Business and Careers.  The ranking bodes well for the future because it was based on five-year annualized figures, which indicates consistently strong trends over time.

 

In the last few months of 2005, Laredo saw an all-time historic low for the city unemployment rate of 4.8 percent in October and ending at 5.6 percent for the year.  This is an extremely essential and positive economic indicator that the City will work to maintain through private and public sector partnerships and maintaining the best environment for new and continued business development. 

 

      Safety and Health

Fire and Police forces maintaining order and protecting the City are the cornerstones to a safe community.  One of the major strides in public safety enhancements is the implementation of the new 800 MHz trunked digital radio communication system that now allows the City of Laredo full interoperable communication within the entire organization and more importantly, with outside agencies at other levels using a similar digital communication platform.  This new system is vastly superior to the analog radios that it replaced.  Field users consistently provide positive feedback, indicating full and complete coverage in all areas of the City.  This budget document reflects an estimated annual maintenance cost of $464,904, for the $7 million system which will be allocated to all user departments.

 

With the Laredo Fire Department, the southern-most sector of the City will see the full activation of the Cielito Lindo Fire Station #14.  The manning of the Engine #14 will be accomplished with the graduation of the current academy of 22 cadets that started in July of 2005 and are expected to graduate in September 2006.  Equipment replacement enhancements are expected with the purchase of a Tele-Squirt Pumper Engine for Central Fire Station #1 and another Fire Pumper Engine for Station #13 at an estimated cost of $780,000.00 and two ambulances at an estimated cost of $290,000 in the 2006-2007 fiscal year.  Additionally, updates to the emergency management plan are scheduled with the creation of a pre-disaster mitigation plan for the City that ties into a regional process. 

 

The Laredo Police Department continues to move forward with the implementation of its Community Oriented Policing philosophy with the recent activation of three workstations at 9402 NE Bob Bullock Loop 20; 5210 State Highway 359; and 13301 Mines Road, each adjacent to a Fire Station, thus, maximizing the use of publicly held land and the collaboration of these two entities.  Funding for a new workstation adjacent to the Cielito Lindo Fire Station #14 is already in the Capital Improvements Project program.  The Laredo Police Department is scheduled to start an academy in January of 2007.  The uniformed force of 411 is well equipped and a strategic investment in weapons, ammunition and other essential equipment upgrades will be maintained in this budget to provide the tools that officers need in the field. 

 

While these departments work towards the overall welfare of the community, one department in particular impacts the health of hundreds of thousands across a four county region.  The Laredo Health Department has readjusted some of its funding mechanisms and reached out to community partners to make up for the overall reduction of 35% in federal and state funding and to provide necessary core public health services.  More progressive steps have been taken to meet the level of service and demand on the Health Department through collaborative partnerships with institutions such as the University of Texas Health Science Center/San Antonio; the South Texas Research Center Bienestar Program, the Environmental Protection Agency and local hospital providers.  An immunization and primary health (La Familia) clinics facility upgrade that was begun in the current fiscal year will be realized in the coming year.  This will help maintain Laredo’s already excellent rate for immunizations of children under the age of two at 100%.  Additionally, Laredo continues to receive Homeland Security funds for its public health and bioterrorism preparedness projects.  As I stated last year, its laboratory is on track to be certified as a Level B lab in the new fiscal year.  This certification will allow for Laredo to perform preliminary testing on suspected bio terrorist agents i.e., anthrax.  This enhances the City’s ability to respond to a terrorist threat by being able to obtain preliminary results locally.  

 

Many times, environmental factors may lead to illness and in this regard the Health Department works hand in hand with the Environmental Services Department (ESD).  These forces have come together to address the accumulation of debris and tires across the city in the on-going effort to make Laredo a cleaner, healthier city.  Administered by the ESD, revenue from the storm water fee met and exceeded projections this fiscal year.  These funds provide the capital to acquire property for the purpose of detention ponds allowing for a much needed improvement to the storm water drainage system.  The land for the retention ponds also doubles as recreational space that is also a much needed amenity in the community. 

           

The City cannot achieve a safe and healthy environment without its community partners.  One recent example is a land donation from the Killam Company, that once improved, will make for a wonderful recreation area in the 2006-2007 fiscal year.  Clean-up work from a recently attained Brownfields grant from the U.S. Environmental Protection Agency for the clean-up of the 18-acre lake site will come to completion in the budget year.  The ESD will also launch a new set of mascots and a refreshed community outreach campaign for the fiscal year 2006-2007.  As the Governor’s Environmental Excellence Award recipient for 2005, the program will stay with its practice of visiting local schools with litter and pollution prevention messages tailored for an elementary school audience.  This “new” attitude will lead to a safer and cleaner environment that Laredoans will like and appreciate.

 

Serving as a galvanizing force, in cooperation with the ESD, is Keep Laredo Beautiful, which also maintains its funding in the proposed FY 2006-2007 budget.  This organization has advanced Laredo’s “green thinking” by galvanizing all those entities that had environmentally sound initiatives, practices and intentions and helped to kick start new endeavors like the special temporary recycling station at the Mall Del Norte site during the peak holiday shopping season.  Collaborative partnerships even within City departments, like Solid Waste Department’s recycling services and Keep Laredo Beautiful, have elevated an international awareness to recycling materials that were once taking up space at the landfill.  Laredo’s appearance is paramount to attracting people and businesses to stay and spend their money in our economy.  Invariably, if they spend then Laredo gets a little part of that investment returned in the form of sales tax.  Sales tax, as well as general property tax, plays a large roll in providing for the quality of life Laredoans want and deserve.

 

     Quality of Life

Quality of life is measured in many ways and Laredoans like to have leisure activity and hobby options that are indoors and outdoors.  There are various projects and aggressive investments on-going and planned to address this all-encompassing facet of our community. 

 

Parks and leisure activity investment has increased significantly in the last decade.  Building on $7.3 million invested in prior years, this 2006-2007 fiscal year there are approximately $6,525,000 in recently issued bond funds to spend on current facility enhancements and new projects including: the Chacon Creek Recreational Improvements; Cielito Lindo Park; Slaughter Park; Dryden Park improvements; East Side Recreation Center design; Eistetter Park light installation; Eleden Recreation Center construction; Father McNaboe Park phase II, Northwest recreation center and pool design; and Santa Rita park enhancements just to name a few. 

An estimated amount of over $16 million is being worked on for a bond issue in FY 2007.  The follow distribution has been recommended for consideration: Drainage $2 million, Public Safety $1.8 million, General Government $2.7 million, Parks $5.950 million, Street $3.864 million and Traffic $250,000. 

 

01-02

02-03

03-04

04-05

05-06

06-07

General Sales Taxes

17,158,252

18,037,788

19,522,556

21,164,417

23,760,979

26,612,298

Transit Sales Taxes

4,092,648

4,331,368

4,690,014

5,026,869

5,593,822

5,990,985

Arena Sales Taxes

4,289,562

4,509,447

4,822,212

5,268,781

5,979,275

6,636,996

 

 

 

 

 

 

CDBG funds have a long history in making for a better quality of life in Laredo, too.  For the last 31 years, CDBG funds have been used to pave streets, construct drainage improvements, parks, sidewalks, community centers, build Police workstations, demolish substandard structures, code enforcement, graffiti removal and other improvements and services.  These grants are made possible through the Community Development Department’s continued responsible fiscal management of the money allocated by the U.S. Housing and Urban Development Department.  These funds will continue to be used in a manner most beneficial to the community with $3,711,628 allocated in the proposed FY 2006-2007 budget. 

 

One area in particular that has benefited from the use of these funds is downtown Laredo, where renaissance is in the air.  The revitalization of the historic Plaza Theatre, the redesign of the Bridge of the Americas/International Bridge I, the Rio Grande Ecosystem Restoration Project and vehicle parking facility at Santa Maria and Zaragoza each play a vital role in the El Portal philosophy that the City of Laredo knows is catching-on across downtown.  These projects represent a collective investment of over $30 million over prior years and in the 2006-2007 fiscal year.  This El Portal philosophy is an all encompassing movement to bring together all the historical components that have made Laredo possible since its establishment in 1755.  The City’s emphasis is on improving one of the most visible international crossing points at Bridge I, the most historically rich site as the City’s birthplace; bringing the river to the people through added access to the vega and thereby recapturing their stewardship towards this natural precious resource; and ultimately elevating a once neglected area to a place of prominence that will insight visitors to come time and time again.  The private sector has engaged the City through this revitalization process and now regular monthly meetings bring downtown merchants and City authorities to the same table.  These meetings have led to a more engaged citizenry, a comprehensive approach to downtown enhancements, and future projects, such as sidewalk reparation and long-term reconstruction.

 

     Organizational Infrastructure

 

The City of Laredo government organization strives to be innovative in best practices, technology and resource creation by developing its workforce and supporting its employees to avail themselves of professional training opportunities.  These prospects are available both within and outside of the organization.  Internally, the Human Resources (HR) Department maintains its funding for training and professional development in programs such as the Certified Public Manager certification and GED attainment courses in the 2006-2007 fiscal year.  Another program that is preserved in the HR budget is the Leadership Development Program that annually graduates approximately 12-18 individuals hand selected by their employee peers to take part in the 10-month professional development course that provides an in-depth look at various internal City operations, networking and team building opportunities, a problem solving exercise assigned by the City Manager and public speaking component.  These types of practices are essential to maintaining good employee morale and retaining individuals that might need an added challenge in their day-to-day workload. 

 

Another major milestone in this budget year that will continue into the 2006-2007 fiscal year is due to the transition from the Texas Municipal League Intergovernmental Employee Benefits Pool as a Third Party Administrator for the City’s self-funded benefit plan to Blue Cross Blue Shield of Texas.  The City is projecting a savings due to a 55% targeted network discount on expected medical claims.   These savings will go towards balancing out the rising costs of health care and enhancing the benefit plan for our employees and their expressed dependents. 

 

The overall health of the organization is reflected in its respective medical records but also in other records that have been set through its participation in voluntary charitable events.  The City of Laredo employees hold the distinct titles of being the Highest Employee Group Contributor and Community Leader from the United Way of Laredo.  Additionally, they hold the titles of the Most Funds Raised by an Organization and Highest Employee Participation from the American Cancer Society’s Laredo/Webb Unit Relay for Life fundraising campaign; City of Laredo employees gave a grand total of $165,000 in 2005-2006.  An even more impressive figure is $806,712.  This is the amount that City employees have reinvested into community organizations from their own pockets since 2001.  This is made possible through a liaison mechanism known as the R.E.A.C.H. Committee, Reinvesting Employees and Caring Hearts, that facilitates each fundraising campaign for the City Manager.  This group of eight employees acts as the go between for the non-profit agency and each City department that participates in the event.  This committee has received numerous awards for its far-reaching efforts over the years.

 

The employee development measures and management supported efforts to reinvest in the community’s infrastructure through these established charities provide for a more adept and cohesive work force.  These efforts have come back to be reflected in a most recent recognition when the City was named the recipient of the Customer Service Shining Star Award by the Laredo Chamber of Commerce in April of 2006.  This distinction was attained through a competitive process by an independent panel of judges established by the Chamber.  This accomplishment and many others achieved by City employees provide a solid infrastructure network that makes for an excellent and irreplaceable resource in the community and beyond.  City of Laredo employees make this budget and all other services possible. 

 

     Conclusion

     Finally, I am proud to present this balanced budget and tremendous tool that acts as a   

     manual both internally and externally.  Our departments use it to maintain their work  

     environments and provide services and our citizens utilize it in many ways.  They know

     exactly what to expect and if they want to see changes today, tomorrow or in the future, I

     invite them to attend our public workshops and public hearings so that they too may    

     have input in our budget planning process.  I would like to repeat that Laredo has yet to

     realize its full potential, but with this budget document as a guide and a consensus on the

     policy board, this administration and 2,600 employees can achieve the community’s

     goals.”

            B.  Ad-valorem tax rate and financial prognosis.

 

                 Elizabeth Martinez, Tax Collector/Assessor, gave the following presentation:

 

                 Current Year Collection Rate with Original Roll

 

                 2002           95.37

                 2003           96.98

                 2004           96.63

                 2005           97.25

                 2006           97.25

 

                 Prior Year Collection Rate with Original Roll

 

                 2002                       32.32

                 2003                       39.46

                 2004                       39.91

                 Est. 2005                35.67

                 Est. 2006                35.67

 

                 Truth in Taxation

                 A Guide for Setting Tax Rates

 

The Texas Constitution and Property Tax code embody the concept of truth-in-taxation to require taxing units to comply with certain steps in adopting their tax rates.

 

Four Principals in Truth in Taxation

 

Right to know of increases in property value and estimated taxes that could result from the new value.

 

Most taxing units must publish effective and rollback rates before adopting an actual tax rate.

 

Most taxing units must publish special notices and hold a public hearing before adopting a tax rate that exceeds the lower of the rollback rate or the effective tax rate.

 

If a taxing unit adopts a rate that exceeds the rollback rate, voters may petition for an election to limit the rate to the rollback rate.

 

Effective Tax Rate

 

The effective tax rate is a calculated rate that would provide the taxing unit with about the same amount of revenue it received in the year before, on properties taxed in both years.

 

Rollback Tax Rate

 

The rollback rate is a calculated maximum rate allowed by law without voter approval.

 

It provides the taxing unit with about the same amount of tax revenue it spent the previous year for day to day operations, plus an extra 8 percent for those operation, and sufficient taxes to pay its debts in the coming year.

 

Effective & Rollback Tax Rate Comparisons

 

                                                       Tax Year 2005                         Tax Year 2006

Effective Tax Rate                           .601433                                   .593454

Rollback Rate                                  .643867                                   .638537

Adopted Tax                                   .637000                                   .637000 (Proposed)

 

City of Laredo Tax Rate History

 

2001           0.576358

2002           0.630534

2003           0.641761

2004           0.637000

2005           0.637000

2006           0.637000

 

                 Noe Hinojosa, Financial Advisor, gave the following report:

 

                 2006 Debt Portfolio (Principal Only)

 

                 BONDS                                                                 Now                 Ratings

 

                                                                                                                        Mdy     S&P     Fitch

 

                 Property Tax                                                                                   A2       A+       A+

                 Property Tax Debt                                                   $155,940,000

                 Less:  Self-Supporting                                                  88,987,930

                 Net General Purpose                                                   66,952,070

 

                 Waterworks & Sewer System Revenue                                                                              

                 Senior Lien                                                              $  33,260,000

                 Junior Lien                                                               $    1,969,000

                 Self-Supporting C/O’s                                             $  50,874,038

                 Total Waterworks & Sewer System                          $  86,103,038

 

                 International Bridge System Revenue

                 Senior Lien                                                              $  73,180,000

                 Junior Lien                                                               $  24,300,738

                 Total International Bridge System                             $  97,480,738

 

                 Sales Tax Revenue                                                 

                 Senior Lien (2)                                                        $  36,205,000

 

                 Total:                                                                       $324,854,738 

 

                 Existing Debt Service

 

                 Fiscal Year Ending               Existing Debt Service

                                   

                                                            PRINCIPAL    INTEREST      TOTAL

                 2006                                   14,755,000      6,820,293        21,575,293

                 2007                                   14,155,000      7,346,055        21,501,055

 

                 Less:  Self-Supporting Debt Service

 

                                                            PRINCIPAL    INTEREST      TOTAL

                 2006                                   8,177,002        4,362,700        12,479,701

                 2007                                   7,962,975        3,195,491        11,158,466

 

                 Total Net Debt Service Requirements

 

                                                            PRINCIPAL    INTEREST      TOTAL

 

                 2006                                   6,637,998        2,457,593          9,095,592

                 2007                                   6,192,025        4,150,564        10,342,589                             

                                               

                  For additional charts please call the City Secretary’s Office at 791-7313.

                 

            C.  Personnel issues, including proposed employee pay plan and employee health

                and benefits plan.

 

                 Dan Migura, Administrative Services Director,

 

                 Proposed Pay Plan

                 2.0% (COLA) Cost of Living adjustment

                 Effective Date 04-01-07

                 Except unless otherwise addressed in a collective bargaining agreement

                 Retain the current merit pay plan

 

                 Cost of Living Adjustment Summary

                 2006-2007 2.0% Proposed COLA

 

                 2005-2006             2.5%

                 2004-2005              2.3%

                 2003-2004              1.6%

                 2002-2003              2.8%

                 2001-2002              3.0%

 

                 Percentage of Increase     Evaluation Score                    Evaluations Processed

                 0%                                      2.9 or Less                               9

                 1%                                      3.0 – 3.49                                47

                 2%                                      3.5 – 3.99                                142

                 3%                                      4.0 – 4.49                                441

                 4%                                      4.5 – 5.0                                  564

 

                 Entry Level Wages of Local Entities

 

                 Location                              Salary

                 Webb County                      $8.66

                 TAMIU                               $8.18

                 UISD                                  $7.85

                 City of Laredo                     $7.67

                 LCC                                   $6.74

                 LISD                                   $6.24

 

                 Action Needed:

 

                 Motion to instruct the city Manager to implement recommended merit pay plan, and the             COLA as approved by City Council at 2.5% starting October 1, 2006

 

                 Moved:  Cm.  Garza

                 Second:  Mayor Pro Tempore Ramirez

                 For:     8                                          Against:  0                                            Abstain:  0

 

                 Employee Health & Benefits Plan

 

                 Facts

 

Escalating Medical and Prescription cost trends continue to deplete the City’s Health and Benefits Fund.

 

Since the plan was implemented in 1989 the following modifications have occurred:

 

1991 Rate Adjustment

1996 $10.00 Physician Office Co-Payment introduced

October 2000 10% Rate Increase

October 2003  5% Rate Increase and Plan Modification

October 2004 5% Rate Increase

October 2005 10% Rate Increase (City Contribution only)

 

Current Employee Health Benefits Plan Adjustment

 

Increased City’s Portion of the Medical Contribution Rate by 10%

Increased Out of Pocket Maximum to $2,500

Changed to a three (3) tier Prescription Plan

 

Proposed Employee Health Benefits Plan

 

Increase the City’s Portion of the Medical Contribution Rate by 5%

Increase Lifetime Maximum from 1 Million to 2 Million

Increase Emergency Room co-pay from $50 to $100

Remove $400 Annual Maximum from Preventative Care Benefit

Change ground/air ambulance to BCBS TX Standard

Routine lab and X-Ray to 100%

Prescription – Allow the plan to cover smoking Cessation Prescriptions

Add 4th Quarter Deductible Carryover

 

Proposed Dependent Medical Contribution

 

                               Current                         Proposed                     Adjustment

Regular                    $114.42                                   No change                    $0

 

Bi-Weekly Deduction

 

Fire/Police               $102.95                                   As Specified in their respective

Collective Bargaining Agreements        

 

                 Medical Claims

 

                 01-02                      $6,612,500                  $5,512,472                  +100,027

                 02-03                      $6,804,375                  $6,798,080                  +6,295

                 03-04                      $9,027,338                  $9,690,796                  -663,458

                 04-05                      $10,966,017                $11,315,197                -349,180

                 05-06                      $8,848,908                  $5,492,489                  +3,356,418

                 06-07                      $7,500,000                  $0

 

                 Estimated Additional Expenditure projections

 

                 05-06                      $1,307,735                                                      +2,048,682

                 Pending 10 reporting weeks

               

                 Prescription Claims

 

Action Needed

 

Motion to instruct the City Manager to implement the benefit medical plan modifications. 

 

1.  Increase the City’s portion of the medical contribution rate by 5%.

2.  Increase lifetime maximum from 1 million to 2 million.

3.  Increase emergency room co-pay from $50 to $100.

4.  Remove $400 annual maximum from preventive care benefit.

5.  Change ground/air ambulance to BCBS Tx Standard.

6.  Routine Lab and x-ray to 100%

7.  Prescriptions – all the plan to cover smoking cessation prescriptions.

8.  Add 4th quarter deductible carryover.

 

Moved:  Cm.  Garcia

Second:  Cm.  Amaya

For:      8                                         Against:  0                                            Abstain:  0

 

D.  Proposed General Fund highlights.

 

      Martin Aleman, Budget Director, gave the following report.

 

                  Consolidated Budget          Total Available                         $479,678,946

                  Enterprise Funds                 $203,643,733

                  General Fund                      $134,633,426

                  Special Revenue                 $  72,573,039

                  Debt Service                      $  31,269,302

                  Internal Service                   $  30,332,977

                  Improvements Fund            $       306,301

                  Other Programs                  $       795,921

                  Permanent Fund                 $         63,192

 

                  Consolidated Operating Revenues

 

                  Debt Service                                              11%

                  Bridge                                                        13%

                  Water                                                         8%

                  Transit System                                            6%

                  Solid Waste                                                5%

                  Health & Benefits                                       4%

                  Sewer                                                        5%

                  Health                                                        3%

                  Airport                                                       2%

                  Special police Programs                             

                  Community Development                            2%

                  Fleet                                                           2%

                  Risk                                                           1%

                  Sports & Community Venue                       2%

                  Hotel Motel                                                1%

                  General Fund                                              32%

 

                  Consolidated Operating Expenditures

 

                  Water                                                         11%

                  Bridge                                                        11%

                  Debt Service                                              10%

                  Sewer                                                        6%

                  Transit System                                            5%

                  Solid Waste                                                5%

                  Health & Benefits                                       4%

                  Other                                                         5%

                  Health                                                        3%

                  Fleet                                                           2%

                  Special Police Programs                             2%

                  Airport                                                       1%

                  Risk                                                           1%

                  Community Development                            1%

                  Hotel Motel                                                1%

                  Sports & Community                                  1%

                  General Fund                                              30%

 

                  General Fund Revenues

 

                  Charges for Service                                    24.3%

                  Franchise Fees                                           5.7%

                  Licenses & Permits                         5.1%

                  Fines & Forfeits                                          2.1%

                  Rents & Royalties                                       1.3%

                  Fees & Collections                         0.5%

                  Intergovernmental                                       0.4%

                  Reimbursements & Miscellaneous   0.3%

                  Other Financing Sources                             0.0 %

                  Taxes                                                         60.2% 

 

                                                                        FY04-05                      FY05-06          FY06-07

                  Property Taxes  (M & O)   $32,299,465                $37,139,530    $41,584,144

                  General Sales & Use Tax                $21,164,417                $23,760,979    $26,612,298

                  Bridge Transfer                               $16,534,516                $19,682,724    $20,075,616

                  Electric System Franchise   $  4,238,265                $  4,354,618    $  4,707,164

                  Municipal Court Fees                     $  2,649,033                $  2,503,351    $  2,521,484

                  Telecommunications                        $  2,767,931                $  2,942,975    $  2,987,119

 

                  Tax Rate History

 

                                                            FY03-04          FY04-05          FY05-06*        FY06-07*

                  Debt                                   0.141113         0.128323         0.124981         0.124981

                  M & O                               0.500648         0.508677         0.512019         0.512019

 

                  Tax Collection Rate on Original Levy

 

                  FY03-04                96.98%

                  FY04-05                96.63%

                  FY05-06                97.25%

                  FY06-07                97.25%

 

                  Valuations

 

                  FY03-04                $6,084,943,928

                  FY04-05                $6,761,295,604

                  FY05-06                $7,434,467,975

                  FY06-07                $8,351,261,334

 

                  Sales Tax Trend History

 

                                                            FY03-04          FY04-05          FY05-06          FY06-07

                  Arena                                   $4,822,212      $5,268,781      $5,979,275      $6,636,996

                  Transit                                  $4,690,014      $5,026,869      $5,593,822      $5,990,985

                  City                                    $19,552,556    $21,164,417    $23,760,979    $26,612,298

 

                  General Fund Expenditures by Activity

 

                  Traffic                                              3.9%

                  General Government                       13.4%

                  Cultural & Recreational                     9.3%

                  Other Financing Uses                        8.8%

                  Public Works                                   4.2%

                  Health & Welfare                             0.3%

                  Public Safety -  Police/Fire 60.0% 

               

                  General Fund Expenditures by Category

 

                  Personnel                                       74.97%

                  Debt Service                                  0.04%

                  Capital Outlay                                0.03%

                  Other Charges                                1.01%

                  Materials & Supplies                      5.22%

                  Intergovernmental Transfers            5.78%

 

                  Materials and Supplies Expenditures History

 

                                                            FY03-04          FY04-05          FY05-06          FY06-07

                  Public Works                     $303,800         $547,623         $654,221         $1,060,502

                  Cultural & Rec.                  $1,150,090      $1,191,186      $1,278,541      $1,292,872

                  General Government           $371,901         $429,317         $521,385         $597,060

                  Public Safety                      $2,327,611      $2,575,788      $3,134,562      $3,258,319

 

                  Contractual Services Expenditures History

 

                                                            FY03-04          FY04-05          FY05-06          FY06-07

                  Public Works                     $   908,401      $   884,099      $   853,710      $   837,411

                  Health and Welfare $   721,375      $   452,062      $   438,584      $   405,223

                  General Government           $1,662,788      $1,811,511      $2,516,558      $2,622,577

                  Public Safety                      $4,641,966      $5,108,415      $5,657,809      $6,742,204

                  Cultural & Recr.                 $1,571,325      $1,978,718      $2,217,407      $2,328,333

                  Other                                 $1,772,974      $1,967,716      $1,995,753      $2,154,375

                  Insurance                            $1,155,013      $1,261,310      $1,270,427      $1,407,557

 

                  Personnel Cost by Activity

                 

                                                            FY03-04          FY04-05          FY05-06          FY06-07

                 

                  Public Works                     $  4,056,282    $  4,264,242      $ 4,799,363   $  3,056,639

                  Cultural & Recreational       $  5,703,290    $  6,185,370    $  6,282,688    $  7,394,428

                  General Government           $  8,565,490    $  9,225,780    $10,028,540    $12,607,509

                  Public Safety                      $53,279,827    $55,845,742    $60,429,893    $65,919,773

              

                 Full Time Equivalents

 

                                                            FY03-04          FY04-05          FY05-06          FY06-07

 

                  Public Works                     118.50             105.50             67.50               67.50

                  Culture & Recreational       202.67             199.18             199.18             208.33

                  General Govern                  205.34             199.79             242.79             231.54

                  Public Safety                      766.25             761.42             780.00             818.25

 

                  FTE History (All Funds)

             

                                                             FY03-04         FY04-05          FY05-06          FY06-07

 

                  Transit System                      181.31              179.31             179.31             179.31

                  All Other                              992.99           1,104.21          1,123.15          1,115.98

                  General Fund                      1,292.76          1,265.89          1,289.47          1,325.62

 

                  Consolidated Closing Balance    $85,259,902

 

                  General Fund                      17.92%

                  Special Revenue Funds       23.81%

                  Debt Service                        7.70%

                  Enterprise Funds                 49.26%

                  Internal Service                     1.21%

                  Permanent Funds                  0.08%           

                  Other Programs                    0.02%

 

                  General Fund

             

                 Closing Balance History

 

                                                             FY03-04         FY04-05          FY05-06          FY06-07

 

                  Closing Balance                  10,327,104      14,321,498      15,683,215      15,683,215

                

E.  Bridge Department  funding and operations.

 

     Mario Maldonado, Bridge Director, gave the following presentation:

 

     Revenue Comparisons

 

      Estimated Revenue FY05-06 as of March 2006

     

      Budget       $38,578,021

      Actual        $39,365,449

 

      End of Year FY2005-2006

      Budget to Actual Revenue Comparison as of July 2006

 

      Budget       $38,578,021

      Actual        $38,837,821

 

      Revenue Comparison

      Budget       $32,038,875   

      Actual        $32,298,675

 

      Revenue Comparisons

 

      FY04-05    $33,069,032

      FY05-06    $38,837,821

      FY06-07    $39,614,577

 

      5 Year Comparison

 

      FY00-01    $28,547,940

      FY01-02    $31,363,301

      FY02-03    $32,437,506

      FY03-04    $33,157,416

      FY04-05    $33,069,032

      FY05-06    $38,837,821

 

     Traffic Comparisons

 

      Border City Commercial Traffic Growth Comparison

 

      Eagle Pass     1,579

      Mc Allen                   1,090

      Pharr                      13,062

      Brownsville   12,061

      El Paso                     10,015

      Del Rio                       4,619

      Laredo                   178,484

 

      Commercial

 

      FY02-03                1,397,421

      FY03-04                1,453,806       

      FY04-05                1,485,435

      FY05-06                1,714,201

      FY06-07                1,796,482

 

      Non-Commercial

 

      FY02-03                7,020,327

      FY03-04                7,025,709

      FY04-05                6,655,426

      FY05-06                5,969,917

      FY06-07                5,725,150

 

      Border City Non-Commercial Traffic Comparison

 

      Laredo                   -10%

      El Paso                   -7%

      Pharr                      -6%

      Eagle Pass  -5%

      McAllen                 -3%

      Brownsville -2%

      Del Rio                   -1%

 

      Pedestrian

 

      FY02-03                4,028,299       

      FY03-04                4,133,170

      FY04-05                3,993,263

      FY05-06                4,137,020

      FY06-07                4,178,390

 

      Laredo Trade Tag Easy Go AVI Status Report

 

      Commercial Tags                7,700               32%

      Non-Commercial                16,200             68%

 

      Total Active AVI Tags        23,900

 

      Non Commercial Traffic

 

      Average Daily Traffic          13,700             81%

      Average Daily AVI 3,300               19%

 

      Construction Projects

 

      El Portal Project

      Juarez-Lincoln Bridge Widening and SENTRI Lane

      Santa Ursula Connector

      Colombia Solidarity Bridge Erosion Control

     

      Technology Upgrade

 

      Interoperable AVI Reader System

 

      Interoperable AVI Reader System

 

      Harris County Toll Road Authority  ATA Protocol              1,500,000 Tags

      North Texas Tollway Authority                   ATA Protocol              1,000,000 Tags

      Mexico CAPUFE                                       ATA Protocol              46,000 Tags

      U. S. Customs Fast Lane                            EGO Protocol              Bridge IV

      U. S. Customs Sentri Lane              EGO                            Bridge II

 

      Interoperable AVI Reader System

 

      Today                                                                    Tomorrow

      Allegro Tag                                                            Sticker Tag

      Estimated Cost - $1.5M                                         Cost of sticker $13.00

      Commence FY06-07                                             Different Protocols

      Sticker Tags (Non-Battery)                                    Interoperability

 

F.  Engineering Department funding and operations.

 

                  Rogelio Rivera, Engineering Director, gave the following presentation:

 

                  Mission Statement:

 

                  To plan and implement City infrastructure, and to provide quality control/inspection of                construction.

 

                  Organizational Chart

 

                  Engineering Department (38 FTE’s)

                  Administration (6 FTE’s)

                  Design/Drafting/Surveying (20 FTE’s)

                  Inspection (12 FTE’s)

 

                  Performance Measures

 

                  Infrastructure Improvements FY06 to date

 

                  65 City Projects                 $  48,141,401

                  131 Subdivisions                $  89,922,442

                  137  Professional                $  11,391,077

                  TOTAL                              $149,454,920

 

                  Subdivision Improvements

 

                  Fiscal Year             Subds.              Dollar Amount

                  FY2000                             73                    $43,000,000

                  FY2001                             55                    $31,080,513

                  FY2002                             56                    $22,448,254

                  FY2003                             80                    $28,310,743

                  FY2004                             113                  $54,256,984

                  FY2005                             123                  $64,496,006

                  FY2006                             131                  $89,922,422

 

                  Subdivision Improvements

 

                  FY2000                             73

                  FY2001                             55

                  FY2002                             56

                  FY2003                             80

                  FY2004                             113

                  FY2005                             123

                  FY2006                             131

 

                 Infrastructure Improvements*

 

                                                            City                             Private                                    Total

                  Paving (Blks)                      206                                    870                                       1,076

                  Sidewalks                           149                                    696                                           845

                  Storm Sewer (LF)  2,726                           79,767                                      82,493

                  Sanitary Sewer (LF)           3,913                           248,932                                   252,845

                  Water (LF)             889                              86,738                                     287,627

                  Lots (Subdivisions) 0                                     4,274                                        4,274

                  Acres (Subdivision)            0                                     1,746                                        1,746

                  Public Buildings (SF)          81,391                                 0                                        81,391

 

                  Financing Instruments issued this year

 

                                                                        Letters of Credit                       Trust Agreements

                  Number                                                      24                                            16

                  $ Amounts                                $7,176,639                              $143,511

 

                 List of Architect/Engineer Consulting Projects Under Contract

 

                  Calton Road Overpass

                  Flecha Lane Realignment

                  Flecha Lane Drainage improvements

                  Bartlett Avenue Extension @ Airport

                  McPherson/Hillside Intersection Street Improvements

                  Saunders/Bartlett Intersection Street

                  Del Mar Widening @ Winfield Subdivision

                  Laredo Street Drainage Improvements Phase II

                  Maryland/Taylor Drainage Improvements

                  Zacate Creek Upper Reaches Drainage Improvements

                  Texas/Milmo Utilities Improvements

                  Santa Ursula Avenue Down Ramp

                  Springfield Avenue North Extension

                  Rehabilitation of Laredo/Colombia International Bridge Phase II

                  Airport Improvement Projects

 

                  List of Projects Designed In-House

           

                  Ejido Avenue Sidewalk Project (Loop 20 to Pine Street)

                  Chacon Creek at Smith/Ejido Avenue Street Paving & Drainage Improvements

                  Lafayette Park – Parking Lot Improvements

                  North Heights Drainage at Ash Street

                  Rancho Viejo Sidewalks Project

                  Police Department Parking Lot (Preliminary)

                  Police Department Parking Lot at Airport Bldg # 60

                  Transit Sales Tax Sidewalks Project – 27 – ½ Blocks

                  Taylor Street Sidewalks Project – 5 ½ blocks

                  Cigarroa Recreational Center Parking

                  Dryden Park Drainage

                  Lafayette St.  Hockey Rink

                  Farias Recreational Center

                  McPherson Rd.  Widening (Villa – Circle)

                  Father McNaboe Splash Park

                  Father McNaboe Park Improvements Phase II – parking, drainage, all purpose field,                             soccer field, pavilion, playground area, volleyball court, walking trails, and

                           decorative retaining walls. 

 

                  Surveying Work

           

                  Boundary Surveys    59

                  Construction Surveys            75

                  Misc. Surveys                       57

                  Total                                  191

 

                  Street Cut Revenues

           

                  1999-2000                         $113,693

                  2000-2001                         $116,389

                  2001-2002                         $120,478

                  2002-2003                         $109,325

                  2003-2004                         $115,825

                  2004-2005                         $150,459

 

                  2005-2006 Major Projects Completed

           

                  Laredo/Colombia International Bridge Erosion Repairs

                  Santa Maria Reconstruciton (Industrial Blvd.  to Del Mar Blvd.)

                  Airport Improvement Projects

                  (El Metro) Sidewalks

                  Santa Rita Park Improvements

                  Solid Waste Department Parking Lot Improvements

                  Fire Station No. 14 – Cielito Lindo Subdivision

                 CDBG Sidewalks City – Wide Project Nos. 29 and 31

                  Three police Substations

 

                  2005-2006 Projects under Construction

 

                  El Portal Project                                         85%

                  International Bridge II                                 80%

                  Los Obispos Housing Project                     90%

                  Gale Street Drainage Improvements            40%

                  Immunization Clinic Health Depart. 80%

                  Ejido Ave.                                                  70%

                  Laredo Street Drainage Improvement          10%

                  Transit Sales Tax Projects               50%

                  Plaza Theater Marquee                               25%

                  CDBG Sidewalks, City Wide                     10%

 

                  2006 Contractual Obligation Bond Projects – Status

           

                                                Project                                                            Status

                  COPS Substation – Cielito Lindo                                        RFP

                  Fire Department Headquarters Bldg                                    RFQ

                  Del Mar Widening (McPherson – BB Loop)                       RFP

                  Springfield North Extension                                     RFP

                  Laredo St.  Drainage Impts.                                                Amed A/E

                   Santo Nino Branch Exp Library                                         RFP

    

                 

                 Motion to adjourn for day one.                                                                    Time:  10:03

 

                 Moved:  Cm.  Amaya

                 Second:  Cm.  Chavez

                 For:     8                                          Against:  0                                            Abstain:  0