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Min 08/13/2024 City of Wichita Falls f M7°s City Council Meeting 4/ .....� Minutes \-1111)1C. 4 517(5 August 13, 2024 9liM6RCf+L 4 N , TEXAS <6+ " /J Rhteiskres 46,ides-Oipe-I'tcewi res Item 1 - Call to Order The City Council of the City of Wichita Falls, Texas, met in a special session at 8:30 a.m. on the above date in Rooms 8-10 at the MPEC, with the following members present. Tim Short - Mayor Bobby Whiteley - Mayor Pro Tem/At-Large Mike Battaglino - Councilors Jeff Browning - Larry Nelson - Michael Smith - Tom Taylor - Darron Leiker - City Manager Kinley Hegglund - City Attorney Marie Balthrop - City Clerk Mayor Short called the meeting to order at 8:30 a.m. Item 2a — Invocation Pastor Michael Hanson, First Presbyterian Church, gave the invocation. Item 2b — Pledge of Allegiance Mayor Short led the Pledge of Allegiance. Item 3 — Work Session to Consider Proposed FY 2024-2025 Budget 8:33 a.m. Stephen Calvert, Director of Finance/CFO, presented the proposed balanced budget, the budget process timeline, and changes since the pre-budget workshop. He noted that the City was awarded the Distinguished Budget Presentation Award from GFOA for the 2023- 2024 fiscal year. The proposed budget would maintain current services, reduce the property tax rate from $0.6800 to $0.6775, provide a 4% COLA for all employees, allocate $29 M for capital expenditures, increase utility rates by 2.5% (lower than the CPI), and allocate an additional $4 M for future capital improvements. Mr. Calvert discussed the various funding sources and how they maximize outside funding sources, the approximate unallocated $650,000 in property tax revenue due to positive changes in the final certified property values, the property tax rates, including the current rate of $0.6800, the no-new-revenue rate of $0.644369, the voter approval tax rate of$0.684907, and the proposed rate of$0.6775. He discussed the history of tax rates and how this would be the fourth year in which the tax rate has been decreased and stated that debt has also been reduced. Sales Tax Revenue is projected to be flat as it is currently decreasing by approximately 1 .62%, and interest rates remain high. Mr. Calvert stated that inflation has come down slightly and discussed the Municipal Cost Index, Consumer Price Index, Employment Cost Index, and the increase in employment costs. He discussed fund balance projections and designated funds and recommended a $4M transfer for future capital improvements. Mr. Calvert gave an overview of the General Fund and discussed tax rate versus tax levy, property tax exemptions, and a new local option exemption for childcare providers. A full exemption for childcare providers would reduce property tax revenue by approximately $44,000. Councilor Battaglino expressed his interest in providing this optional exemption, and the council expressed support for including it in the proposed budget. General Fund revenue is anticipated to increase by 2.23%. Mr. Calvert discussed proposed fee updates, which include an overall 2.5% increase, and the importance of keeping fees updated to keep up with inflation. Councilor Whiteley asked about the 2.5% increase when our reserves are at policy levels. Mr. Calvert discussed the importance of reserve funds and modest fee increases to prevent one-time large increases, the increase in the cost to provide the service, that fees are revenue-neutral and support the cost to provide the service, and most fees are actually below the current cost to provide it. General Fund personnel costs are 71% of the budget, which includes retirement, healthcare, and employer payroll taxes. The proposed budget originally included a 2% increase in health insurance contributions, but the Employee Benefit Trust determined there would be no increase, and there would be premium holidays for employee contributions. Mr. Calvert discussed the history of pay plan adjustments for step, merit, and COLA, and stated the proposed budget includes a 4% salary increase for all employees. Christi Klyn, Director of Human Resources, stated that 4% is allocated for COLA, so all employees receive the same increase, and pay plans are adjusted to assist CITY COUNCIL MINUTES August 13, 2024 PAGE 2 OF 6 with recruitment. If it were split between COLA and STEP, some employees would not receive the full increase since they are at the top step level. Jon Spraggins, Police Officers Association, asked that the Council continue to do both STEP and COLA as STEP increases award employee longevity, and compare Public Safety salaries with comparable cities. Wichita Falls has the lowest pay for Public Safety employees compared to other cities our size, and Public Safety employees put their lives on the line every day. Councilor Taylor agreed in principle and asked for the association's recommendation. Officer Spraggins said a 16% pay increase is needed and it may take a tax increase to get there, and he acknowledged it is a difficult decision. Councilor Browning discussed the need to increase taxes and said he was for raising taxes to address this, and Councilor Taylor agreed. Mr. Calvert stated that the proposed budget also includes an evening shift differential for police/water/sewer, increased Police recruitment pay, language incentive pay, and an expanded Police take-home vehicle policy. There are also no increases in employee medical premiums and six medical and dental premium holidays. John Burris spoke for the rest of the City staff and asked that they not be forgotten. He feels other city employee voices get lost in public safety discussions. Chief Borrego discussed challenges in hiring and recruiting good Police Officers, a nationwide problem that has been addressed with increased pay, and for us to compete and bring in qualified recruits, we must have competitive pay. Councilor Smith discussed state legislation that only allows the City to raise property tax revenue by 3% and the small amount of revenue we can bring in at the top allowable rate. He discussed the challenges of providing competitive pay when we are not growing. He asked how much additional revenue the City could raise at the top allowable rate, and Mr. Calvert stated it was approximately $565,000. There was a brief discussion about the revenue required to provide a 16% pay increase to Police and the tax rate needed to support that. Mr. Leiker stated that if the Council did nothing else with the additional revenue, they could provide an 8 or 9% pay increase to Police employees only. Officer Spraggins stated that it is disparaging that this has been discussed for years. This is not a new problem, and it is discouraging to the Officers that there is no slide showing what it will take to fix low Public Safety pay. Councilor Smith stated the Council understands the issue and they needed to look at ways to increase pay to help with recruitment. Councilor Whiteley acknowledged that all employees are important, but public safety is different. There was a brief discussion about how taxes may have to be increased, how to increase revenue anywhere they can to address these issues, how tax rates have not been raised for several years, fund balance policies, and proposed fund balance contributions. It was noted that this is an economic CITY COUNCIL MINUTES August 13, 2024 PAGE 3 OF 6 development issue because we need to grow the City and tax base, and some positive opportunities are coming up to help with that. Mayor Short stated that we need to be creative and possibly reduce the amount of funds placed in savings because we will not grow if we are not a safe city. Mr. Jurecek said we do not budget for reserves above the fund balance policy. Those extra reserve funds are from savings throughout the year due to salary savings or items that come in under budget. Mr. Calvert discussed the need to set a maximum tax rate to be considered for the Resolution, which will be passed next week, and he is hearing the desire to set that at the maximum rate just under the voter approval rate. It was noted that at the higher rate, the tax increase would be $4.80 per $100,000 of tax valuation per year. There was a lengthy discussion regarding the need to increase revenues, fund balance, and policies, the use of fund balance, and issues with using one-time funds for ongoing expenditures. The proposed above current expenditures were discussed, including four new full-time positions and strategic plan initiatives. It was noted that the cost of the new Bicycle Safety Coordinator would be offset by the Child Safety Fee paid on vehicle registration and passed along to the city. There was a brief discussion regarding possible grant funds for the additional position in the Fire Marshall division. Mr. Calvert discussed the reduction in capital improvement funds since $2 million in bond funds were used last year and proposed capital fund improvement projects currently totaling $4 million in the FY 25 budget. Mr. Jurecek addressed the sports complex turf replacement and discussed the economic impact of almost $2.6 million. More revenue is being generated in field rental and concessions, and 58% of the teams participating in tournaments from February to June are from more than 80 miles away. The economic impact of these events was discussed. Mr. Jurecek discussed the cost of the next phase, possible funding, and economic impact. Councilor Taylor expressed his desire to upgrade the Municipal Court building. The proposed budget for updating the restrooms is currently $65,000, and he asked that additional funds be added to address other issues. Councilor Smith agreed and said the conditions were deplorable and we needed to do what we could to fix them. There was a brief discussion about the needs in the Municipal Court building, the time it would take for repairs, the impact, and the desperate need to upgrade the building. Mayor Short recessed the meeting for a break at 10:28 a.m. and reconvened at 10:45 a.m. Jon Bradley, Wichita Falls Professional Firefighters Association, asked for the addition of certification pay for individuals who have advanced certifications for paramedics and EMTs and discussed how the level of care for our citizens has increased due to these certifications and noted that 80% of calls responded to are medical. He also asked for additional pay for individuals with peace officer certifications. They feel the cost is minimal CITY COUNCIL MINUTES August 13, 2024 PAGE 4 OF 6 and well deserved. Councilor Whiteley discussed comparable cities' certification pay and the need to prepare for fire-based EMS. Mr. Calvert provided an overview of Water & Sewer funds. Utility rates are proposed to increase by 2.5%, which is less than CPI, and this is to keep up with the cost of providing the service and inflation. Even with the increase, water bill rates are still below average. Expenditures are anticipated to be 3.81% higher, and significant debt will roll off in a few years. Mr. Calvert discussed the proposed capital expenditures, cost of living adjustments, and evening shift differentials included in the proposed budget. Mr. Calvert provided an overview of all other funds, internal service funds, and special revenue funds used to track grants. The next steps will be the public hearing and intent to vote on the tax rate at the August 20th meeting and the adoption of the budget and tax rate at the September 3rd meeting. The consensus is to use a rate just below the VATR as the max, but we can set a lower rate. It is important that we come to an agreement on that day to pass a budget that we can all support. There was a brief discussion regarding how funds will be used once the debt service rolls off. Item 4 — Comments from Citizens 8:45 a.m. There were no comments from citizens. Item 5 - Announcements concerning items of community interest from members of the City Council. No action will be taken or discussed. 12:02 p.m. None Item 6 — Executive Sessions City Council adjourned into Executive Session at 11 :15 p.m. by Texas Government Code §551 .074. CITY COUNCIL MINUTES August 13, 2024 PAGE 5 OF 6 Mayor Short reconvened the meeting in open session at 2:01 p.m. and announced that no votes or polls were taken. Item 7 — Adjourn Mayor Short adjourned the meeting at 2:01 p.m. PASSED AND APPROVED this 2nd day of September 2024. Tim Short, Mayor ATTEST: ate,BCA Marie Balthrop,p, MMC , City Clerk CITY COUNCIL MINUTES August 13, 2024 PAGE 6 OF 6