City of Laredo

Annual Budget Workshop

M2007-W-06

City Council Chambers

1110 Houston Street

Laredo, Texas  78040

August 13, 14, & 15, 2007

5:35 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 for August 13, 2007.

 

            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,                                                                        Mayor Pro Tem, District VI

            Juan Chavez                                                                             Council Member, District VII

            Juan Ramirez,                                                                           Council Member, 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

            Melissa Saldana,                                                                       Acting City Attorney

 

IV.       COMMUNICATIONS

 

            NONE.

 

V.        DISCUSSION AND POSSIBLE ACTION REGARDING THE PROPOSED FISCAL             YEAR 2007-2008 ANNUAL BUDGET.

 

            A.  Introduction of the budget by City Manager Carlos Villarreal, including budget process,

                  vision and goals. 

 

                  “In accordance with the City of Laredo Charter Section 6.02, I am pleased to present                        the fiscal year 2008 City of Laredo Annual Operating Budget for the period of

                  October1,2007 through September 30, 2008. The City's budget encompasses operating

                   expenditures and transfers totaling $404,059,036, a $10.9 million or 2.8% increase                          from 2007. The total net operating budget, excluding operating transfers, is

                  $324,589,860.   The total proposed ending balance for 2008 is $102,197,987,

                  representing an increase of $2.7 million or 2.7% from the 2007 ending fund balance                        and 3 1.4% of the total net operating budget. This financial statement represents the

                  hard work and commitment of City staff to develop a budget that addresses the

                  challenges associated with the growing needs of our community. The budget reflects my

                  commitment to provide a higher level  of service, with an emphasis in addressing those

                  basic services related to street improvements, water, sewer and public safety.

 

                  Tax Rate

 

                  The proposed tax rate for 2008 is projected to remain at the same rate as 2007 at

                  $0.63700 per $100 assessed valuation. The 2008 property values are projected to

                  increase by 12% over the estimated 2007 amended valuations. The total taxable value

                  of $9.4 billion will generate a proposed levy of $59.6 million, representing an increase

                  of $6.1 million or 11.5% over the 2007 levy. The proposed levy excludes an estimated

                  amount of $251,156 for the tax freeze approved by Council for taxpayers 65 years of                               age and older. 

 

                  The proposed maintenance and operations tax rate allocation of .513745

                  will generate a total revenue of $46.8 million for General Fund for 2008, signifying a

                  $5 million or 12% increase over the 2007 estimate.

 

                  The proposed debt service tax rate allocation of -123255 will generate a total revenue                   of $11.2 million fox 2008, a $1.08 million or 10.6% increase over 2007 estimate with a

                  proposed 97.25% collection rate. Total collections for 2007 are estimated at $51.9

                  million, representing 97.08% of the adjusted levy.

 

                  Staffing and Benefits

 

                  A total of 2,473 111 time equivalent positions are included in the 2008 budget at an

                  estimated cost of $138,985,929. Incorporated within this budget is a 2% cost of living

                  adjustment to become effective April 6, 2008 at a cost of $662,189 and a 3% merit

                  increase for all non-civil service employees at an estimated cost of $959,973. A $5

                  increase for health and benefits is proposed for each of the following items: (1) City's

                  contribution for employee coverage; and, (2) City's contribution for dependent                                 coverage. This cost is estimated at $217,055. 

 

                  In line with the directive to improve basic services, the 2008 budget reflects the

                  creation of 6 new street sweeper driver positions for the Public Works Department. This

                   is in addition to the 29 FTEs for the Public Works Department and 20 FTEs for the

                  Utilities Department that are proposed to be created the latter part of 2007 and h d e d

                  through combination tax and revenue Certificates of Obligation for 2007. 

 

                  The following table summarizes the proposed new and deleted positions by department

                  for 2008:

 

 

 

Department

FTE’s

Estimated

 

New Positions

Salary & Benefits

Legal

1.00

46,450

Parks & Recreation

4.5

104,217

Traffic

1.00

34,671

Public Works

6.00

154,357

Fire

15.00

222,923*

Community Development

2.00

68,201

ITSS

1.00

50,938

LCVB

.50

18,674

Totals

31

700,431

 

 

 

 

Deleted Positions

 

Airport

6.00

(491,036)

Health

12.33

(16,012)

ITSS

1.00

(42,611)

City Manager

3.00

(177,793)

Library

2.0

(66,899)

Totals

24.33

794,351

 *Represents the City’s 29% contribution of total costs: 71% or $555,000 is grant funded.

 

                  General Fund

 

                  General Fund revenues for 2007 are estimated to total $1 19,995,953, a $5.2 million or

                  4.5% increase over 2006. Estimated expenditures for 2007 are estimated to total

                  $119,112,845, excluding a one time drawdown of $1,425,000 from fund balance. This                   represents an increase of $1 1.1 million or 10.2% over 2006. The estimated ending fund                   balance of $20,547,3 12 represents a 16.6% of total expenditures excluding operations                   transfers out.  The proposed 2008 budgeted expenditures are $128,618,687 reflecting                               an increase of $8.6 million or 7% over 2007.

 

                  Current 2007 sales tax revenue for General Fund is estimated to total $25.4 million,                         representing a shortfall of $1.168 million from that previously budgeted.  Sales tax

                  growth is at 6.25% rather than that at the 12% initially projected.  A 12% increase was

                  budgeted in 2007 due to the 13.5% growth in sales tax experienced in 2006 from 2005. 

                  The proposed sales tax budgeted for 2008 is $27.4 million representing an increase of

                  8% or $2 million over the 2007 estimate. 

 

                  General Fund receives fifty percent (50%) of bridge toll receipts.  Estimated transfer

                  for  2007 is $19,191,551 a shortfall of $884,065 or 4.4% from budget.  The 2008                              proposed  transfer of $22,287,269 will be realized by the toll rate increase proposed by

                  the Bridge Department.  Revenue will increase by $3,095,712 from 2007.

 

                  General Fund expenditures increased $9.1 million from the 2007 original budget.  The                    categories which will have a significant impact (increase) are as follows:

 

                  Personnel                                      $4,052,690

                  Materials & Supplies                     $   793,621

                  Contractual Services                    $1,290,837

                  Other Charges                              $2,512,442

 

                  Investing to Our Infrastructure

 

                  On July 2, 2007, Council approved a resolution directing publication of a Notice of                         Intent to issue a Combination Tax and Certificates of Obligation for FY2007.  The

                  following table illustrates the proposed activities and corresponding amount: 

 

                  Drainage                                       18,654,000

                  Fire                                                    850,000

                  General Government                      2,607,000

                  Parks                                             16,050,000

                  Streets                                           17,096,745

                  Traffic                                             1,000,000

                  Landfill                                            4,600,000

                  Waterworks                                     7,453,500

                  Wastewater                                     7,145,500

                  Equipment                                     13,891,775

 

                  Drainage, water and wastewater system enhancements continue and will allow for the                   community to prepare for and maintain its prosperity in the future.  Current challenges

                  with drainage and flooding during significant rain events will be addressed and solved

                  on a short and long-term basis.

 

                  Projections remain on a positive level and the community is expected to see continued                   investment from outside firms as well as additional population increases.  With this

                  comes the need to expand current systems to be able to meet the needs of these new                        consumers.  Some of those projects include the expansion of the current water and

                  wastewater treatment facilities and the replacement of an installation of new water

                  distribution and wastewater lines.

 

                  Quality of Life

 

                  Parks and Recreational Facilities

 

                  The development and creation of park and recreational amenities continue to top the

                  list of priorities with $5.7 million budgeted in FY2006 and $16.05 million in FY2007.        This includes projects such as the construction of a municipal golf course,                               Independence Regional Park, El Eden Recreational Center Phase II, the Northwest

                  Recreational  Center and the East Side Recreational Center. 

 

                  Police

 

                  Providing for the public safety of the residents and visitors remains a tope priority with                   420 police officers budgeted for FY2008.  During FY2007, nine additional police

                  officers were added to the General Fund.  We are proposing to add an additional 33

                  officers in January of 2008 at a cost of $1.5 million.  This is contingent on the approval

                  by City Council to increase bridge toll revenues the latter part of FY 2007. 

 

 

                  A total of 27 officers are being transferred to General Fund after completing their third

                  year with the COPS Universal Hiring grants.  Total cost for these officers is $1.8

                  million of which $1.4 million will be funded through the current match; $443,198 is the

                  cost to the General Fund.  The Police Department’s budget of $44.3 million represents

                  34.4% of the City’s total 2008 General Fund budget, excluding the $1.5 million for the

                  33 additional officers.

 

                  Fire

 

                  The City of Laredo’s commitment to public safety is further reflected in its Fire

                  Department’s budget of $32.7 million, representing 24.4% of the City’s 2008 General

                  Fund budget.  During 2007, the Fire Department was awarded “Adequate Fire and

                  Emergency Response” (SAFER) Program fund providing for the staffing of an

                  additional 15 firefighters.  The academy is scheduled to start on October 1, 2007 with

                  23 cadets.  This will boost the Fire Department’s force to 352.

 

                  Organizational Infrastructure

 

                  The firm of Waters Consultant Group was contracted to conduct a feasibility study of

                  the City’s organization during June and July 2007.  A comprehensive report of their

                  observations, findings and recommendations will be presented to City Council during

                  the annual budget workshops on August 13, 14, 15, 2007.  Recommendations include

                  consolidation of departments, upgrading of positions as well as the elimination of

                  positions of streamline the City’s organizational structure and enhance operations. 

                  Plans are to implement these recommendations on October 1, 2007.

 

                  Economic Prosperity

 

                  During FY2007, hotel accommodation and tourist offerings increased with the addition

                  of three new hotels adding a total of 287 rooms to the current inventory.  These

                  included the Holiday Inn Express, Comfort Suites and Value Place Inn.  With the recent

                  hotel expansion there are a total of 4,081 rooms in the market and 44 hotels.  From                         2003 – 2007, this market saw a significant increase of 1,181 total rooms constructed. 

                  This is an average of about 3 hotels constructed per year, signifying major capital

                  investment from industry sources.  Major brand names came with the expansion from

                  Hilton and Marriot. 

 

                  Of significant importance to our community is the recent announcement that the Eagle                   Copper Tube Company will be constructing a manufacturing plant on a 75 acre tract at                   Unitec Industrial Park.  The establishment of this manufacturing facility represents an                   investment of over $100,000,000 and an opportunity to strengthen and diversify the                        local economy.  Projected is the creation of approximately 250 high-skilled, high-                            paying jobs with starting salaries of $17.00 per hour.  It is anticipated that a second

                  phase will be added at this location once the plant is fully operational.

 

                  Legislative Issues

 

                  The City set out to make its priorities know to Laredo legislative representatives based

                  on state and federal agendas approved by Council in August of 2006.  Efforts included

                  setting up preliminary meetings with each office to inform them of our priorities and

                  working with legislative staff during the Texas legislative session and the on-going

                  session of Congress to keep the City’s priorities on track and in focus.  Legislative

                  activities were coordinated in conjunction with the City’s consultants.  While these

                  actions served as an important step in the bill making and appropriations process, the

                  City’s legislative trips to the state and nations capitols serve a crucial role in getting

                  our  priorities heard and in acted in several instances.  

 

                  In January 2007, the Mayor and Members of the Laredo City Council together with

                  staff attended a three day schedule of back-to-back meetings with individuals from the

                  Governor’s Office, Lt. Governor’s Office,, Speaker of the House, chairperson of

                  committees and state agencies such as Texas Department of Transportation, Texas

                  Commission on Environmental Quality and the Texas Department of State Health

                  Services, among others.  Of significant during the trip to Austin was the attendance of

                  Webb County officials, namely the newly elected Judge Danny Valdez.  This same trip                   was replicated in Washington D. C. in March 2007, where the Mayor and the Members

                  of Council and City staff met with White House staff, members of congress; including

                  our two Texas Senators and federal agency representatives which included the U. S.

                  Department of State, Department of Homeland Security, Department of Commerce and

                  Federal Railroad Administration among others.  The City has seen direct benefit from

                  these legislative trips in the form of grant allocations and legislation to advance our

                  priorities.  Most importantly, these trips allow delegates to convey, on a personal level,

                  our needs for our City and how the community is impacted by certain legislation.  Of

                  importance to note, this year’s Austin legislative trip was extended to three days from

                  the usual two-day schedule.  Overall, this allowed the City delegation to have more

                  meetings with high level officials.  The City of Laredo will continue to participate in the

                  legislative process and bring about a higher level of awareness of our community’s

                  legislative issues.

 

                  Closing Comments

 

                  Laredo continues to report tremendous growth, making it imperative that basic services                   related to infrastructure be addressed and opportunities to promote improved quality of

                  life, public safety and economic diversity be supported.  The City of Laredo’s FY2008

                  Budget represents a balanced budget that appropriately addresses the community’s

                  needs and reflects City Management’s continuing commitment to provide for a higher

                  level of service.”

 

                  Sincerely,

                  Carlos Villarreal, City Manager

 

            B.  Update on One Stop Shop.

 

                  Erasmo A. Villarreal, Building Director, gave the following presentation:

 

                  Purpose

 

                  To facilitate orderly development from platting to building.

 

 

 

                  Objective

 

                  To have all staff involved in the development process located in one place.

 

                  Key Points

 

                  Worked with the Laredo Builder’s Association Development Committee to formulate

                  One Stop Shop in Corpus Christi and San Antonio.

 

                  Reduce plat processing time by having staff at one location (save 3 to 4 months)

 

                  Combine Utility Coordination with Technical Review Board.

               

                  Have engineer & developer present at Technical Review board.

           

                  The new software for building permits will include fire department permits and will add

                  new module for tracking plats.

 

                  Click to govwillallow on line capability to track building inspections by contractors.

 

                  Create geographic information system.

 

                  Consolidate code enforcement and cross train inspectors to operate seven days a week,

                  have presence from 7:00 a.m. to 11: 00 p.m.

 

                  Erasmo Villarreal, Building Director, explained that staff is still in the process of                          researching different soft wares and communication devices in order to provide the best                   customer service for the City of Laredo.  He said that the department will return back to         Council with further recommendations. 

 

                  Cm. Chavez instructed staff to look at the possibilities of initiating the One-Stop Shop                location at the base and begin negotiations with the Laredo Airport Director for the

                  possibilities of using one of the structure next to the Laredo Development Foundation. 

                  Also to transfer the employees of the Administrative Services Department to the Bruni

                  Library Bldg instead of housing them on Del Mar. 

 

                  Motion to approve.

 

                  Moved:  Cm. Garcia

                  Second:  Cm. Chavez

                  For:     8                                         Against:  0                                            Abstain:  0

 

                   Motion to limit the CIP Presentation to the CIP of 2007-08 only. 

 

                  Moved:  Cm. Landeck

                  Second:  Cm. Amaya

                  For:     8                                         Against:  0                                            Abstain:  0

                       

 

                 

            C.  Update on Capital Improvement Project, Current Bond Projects.

 

                 This item was heard on August 14, 2008.

           

            D.  Proposed Re-Organization Plan by Mr. Ted Benavides, Water’s Consultant Group.

 

                  Carlos Villarreal, City Manager, introduced Ted Benavides who will be making

                  recommendations to certain departments.  He noted that he has already reviewed the

                  plan with Mr.  Benavides and is concerned about for the individuals that might be

                  moving up or down. 

 

                  Ted Benavides, Water’s Consultants Group, said that the Water’s Group was asked to

                  look at the organizational structure to see if they could suggest improvements with the

                  services, service delivery to internal/external customers and to try to create a leaner

                  organization.  The methodology was construed by talking to the City Council Members

                  except for Council Member Johnny Amaya.  He continued by saying that he has

                  interviewed each and every City Manager and department directors.  They have also

                  reviewed all the budgets and organizational charts including data, personnel, staffing

                  information and they have compared the City of Laredo to other organizations to

                  compare how the City relates to others in practices. He added that he has met with the

                  City Manager staff and outlined the course of action and a time schedule.  They also                                 interviewed and benchmarked all the organizations.  He continued to say that they have

                  compared salaries to the Water’s Consulting Data Base for all Texas salaries.  He

                  explained that they have many recommendations for Council to consider. 

 

                  Motion to present this item as a workshop to City Council.

 

                  Moved:  Cm. Garcia

                  Second:  Mayor Pro Tempore Belmares

                  For:     8                                         Against:  0                                            Abstain:  0

 

            E.  Proposed General Fund highlights.

 

                 Martin Aleman, Budget Director, presented the City of Laredo Proposed Annual Budget            presentation.

 

                  Consolidated Budget Total Available $506,257,023.

           

                  General Fund                      $149,165,999

                  Special Revenue Funds       $81,845,928

                  Debt Service                      $34,037,834

                  Capital Improvements         $3,037,311

                  Other Programs                  $1,030,643

                  Permanent Fund                 $118,964

                  Enterprise Funds                 $202,444,034

 

                  Consolidated Operating Revenues $406,802,094

 

                  General Fund                                  32%

                  Hotel Motel                                    0%

                  Sports & Community                      2%

                  Risk                                               1%

                  Fleet                                               2%

                  Community Development                2%

                  Special Police Programs                 1%

                  Airport                                           1%

                  Environmental Services                   1%

                  Other                                             3%

                  Health Department              3%

                  Sewer                                            4%

                  Health & Benefits                           4%

                  Solid Wastes                                  4%

                  Transit System                                6%

                  Water                                             9%

                  Bridge                                            11%

                  Debt Service                                  12%

 

                  Consolidated Operating Expenditures $404,059,036

 

                  General Fund                                  32%

                  Sports & Community                      1%

                  Hotel Motel                                    1%

                  Airport                                           1%

                  Community Development                2%

                  Risk                                               2%

                  Special Police Programs                 2%

                  Fleet                                               2%

                  Health                                            3%

                  Sewer                                            4%

                  Health & Benefits                           4%

                  Solid Wastes                                  4%

                  Other                                             5%

                  Transit System                                6%

                  Water                                             9%

                  Bridge                                            11%

                  Debt Service                                  11%

 

                  Total Closing Balance (All Funds) $102,197,987

 

                  General Fund                                  20.11%

                  Special Revenue Funds                   27.68%

                  Debt Service                                  5.31%

                  Enterprises Funds                           45.17%

                  Internal Service Funds                    1.60%

                  Permanent Funds                            0.11%

                  Other Programs                              0.01%

 

 

 

 

                  FTE History (All Funds)

 

                  FY04-05                            FY 05-06         FY06-07*        FY07-08*       

 

Transit        179.31                               179.31             179.31             179.31

Other         1,104.21                            1,123.15          1,129.98          1,098.90

General      1,265.89                            1,289.47          1,335.62          1,373.37

 

                  *Amended

                  *Proposed

 

                  General Fund Revenues

 

                  Taxes                                             60.4%

                  Charges for Service                        24.8%

                  Franchise Fees                               5.4%

                  Licenses & Permits             4.8%

                  Fines & Forfeits                              1.9%

                  Parts & Royalties                            1.4%

                  Fees & Collections             0.5%

                  Intergovernmental                           0.4%

                  Reimbursements & Misc.                0.9%

                  Other Financing Sources                 0.0%

                 

                  General Fund Major Revenues

 

                                                FY06-07                      FY07-08                     

Property Taxes             41,820,422                  46,819,662

General & Use                         25,478,048                  27,457,139

Bridge Transfer             19,191,551                  22,287,269

Electric System             4,630,765                    4,769,687

Municipal Court                        2,531,958                    2,504,758

Telecommunication                   3,042,887                    2,931,353

 

                  Tax Rate History

 

                                    FY05-06                      FY06-07                      FY07-08

                  Debt           0.124981                     0.123255                     0.123255        

                  M & O       0.508677                     0.512019                     0.513745

 

                  Tax Collection Rate on Original Levy

 

                  FY04-05                            96.63%

                  FY05-06                            96.64%

                  FY06-07                            97.03%

                  FY07-08                            97.25%

           

                  Valuations

 

                  FY 04-05                           $6,761,295,604

                  FY 05-06                           $7,431,482,261

                  FY 06-07                           $8,403,938,776

                  FY07-08                            $9,410,538,322

 

                  Sales Tax Trend History

 

                                                FY05-06                      FY06-07                      FY07-08                     

                  Arena’s                  $5,965,748                  6,498,524                    7,050,897

                  Transit’s                 $6,658,730                  5,797,040                    6,173,848

                  Allocation               $23,928,715                25,478,048                  27,457,139

           

                  General Fund Expenditures by Activity

 

                  Public Safety-Police/Fire                             59.9%

                  Traffic                                                        3.8%

                  General Government                                   13.5%

                  Cultural & Recreational                               9.1%

                  Other Financing                                          8.8%

                  Public Works                                             4.2%

                  Health & Welfare                                       0.6%

                 

                  General Fund Expenditures by Category

 

                  Personnel                                                   73.78%

                  Contractual Services                                   12.94%

                  Intergovernmental Transfers                        5.78%

                  Materials & Supplies                                  5.49%

                  Other Charges                                            2.89%

                  Capital Outlay                                            0.02%

                  Debt Service                                              0.08%

 

                  Personnel Cost by Activity

                                                                                    FY05-06          FY06-07          FY07-08

                  Public Works                                             4,565,757        3,030,391        3,410,365                          Cultural & Recreational                               6,510,120        7,161,481        7,625,920

                  General Govt                                              9,931,941        12,210,044      13,300,839

                  Public Safety                                              60,321,876      65,810,289      70,470,963

 

                  Full Time Equivalents

                                                                                    FY05-06          FY06-07          FY07-08

                  Public                                                         67.50               68.50               73.50

                  Culture & Recreation                                  199.18             208.33             209.83

                  General Government                                   242.79             231.54             231.74

                  Public Safety                                              780.00             827.25             855.25

                  Health and Welfare                                                                         3.05

                                   

            F.  Bridge Department funding and operations.

 

                  This item was not heard.

            G.  Engineering Department funding Operations.

                 

                  This item was not heard.

 

            H.  Parks & Recreation Department funding operations.

 

                  This item was not heard.

 

            I.  Public Works Department funding and operations.

 

                  This item was not heard.

 

            J. Traffic Department funding and operations.

 

                  This item was not heard.

 

            K.  Solid Waste Services Department funding and operations.

 

                  This item was not heard.

 

            L.  Fire Department funding and operations.

 

                  This item was not heard.

 

            M.  Airport Department funding and operations.

 

                  This item was not heard.

 

            N.  Police Department funding and operations.

 

                  This item was not heard.

 

            O.  Health Department funding and operations.

 

                  This item was not heard.

 

            P.  Utilities Department funding and operations.

           

                  This item was not heard.

 

            Q.  Transit/El Metro funding and operations.

 

                  This item was not heard.

 

            R.  Funding and operations of the Mayor and City Council, City Manager’s Department,

                  Building Department, City Attorney’s Department, City Secretary’s Department,

                  Community Development Department, Laredo Public Library, Municipal Court

                  Department, Information Technology and Support Services Department, Convention                               and Visitor’s Bureau Department, Environmental Services Department, Finance

                  Department, Planning Department, Human Resources Department,  Tax Department,                              Budget Department, Communications, and Administrative Support Services, and Third

                  Party Funding.

 

                  This item was not heard.

 

                  Motion to adjourn.                                                                          Time:  9:25 p.m.

 

                  Moved:  Cm. Garza

                  Second:  Cm. Rendon

                  For:     8                                         Against:  0                                            Abstain:  0