City of Choice. People are moving to Hewitt. Booming Housing market in an around Hewitt. Significant New Construction

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Elijah Gibbs
5 years ago
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2 City of Hewitt

3 City of Choice People are moving to Hewitt Booming Housing market in an around Hewitt Significant New Construction Two (2) New Apartment Complexes open now Significant INCREASE in demand for City Services

4 What we do Serve approximately 15,000 residents One of the main purposes of the City s is to maintain, protect, and enhance the value of property in the City Respond to emergencies and calls for service Maintain and improve citywide infrastructure Provide Quality of Life Amenities to the public

5 What we do Majority of services are supported by Taxes City does not profit from providing services Majority of Ongoing Expenses (approximately 79%) are related to personnel salaries and compensation

6 All City Services Parks Library Streets Right-of-way mowing Police Fire Public Safety Dispatch Water Animal Control Finance & Administration Community Services Planning & Development Inspections Municipal Court Human Resources Drainage Maintenance Wastewater Code Enforcement

7 General Fund Activity Summary

8 Public Safety Total Number of CAD entries - 17,467 Number of Police Calls - 12,289 (excludes traffic stops and citations) Number of Traffic Stops - 3,155 Number of Citations *July 1, 2017 to present

9 Public Safety CID Cases Animal Services Calls Animal Bite Calls - 25 Number of Code Enforcement Calls - 473

10 Streets & Drainage Miles of City Maintained Streets acres of City Maintained Drainage Areas Acres of right-of-way

11 Parks 91.5 Acres of City Parks (Warren, Hewitt, & Glaze) 251 Paid Park Reservations Approximately 120,000 vehicles visited Hewitt Park* Acres of Additional Mowing & Maintenance (City Property & Facilities) *Estimated based on 2,300+/- cars per week in Hewitt Park

12 Library 4,856 Attendees for Summer Programs (past 12 months) 179 Attendees for Teen Programming 81,659 visitors to Hewitt Public Library 127,566 Total Items Circulated (not including e- books) 45,898 In Library Use Items Checked out

13 Fire 1,030 Emergency Calls 61 Fire Inspections 78 Hours of Public Relations & Programming 833 Fire Hydrants Maintained 1,389 Hours Training (92.5 Hrs of Continuing Education per Fire Fighter)

14 GF City Employees Budgeted Full Time Equivalent (FTE) Employees Includes Temporary Summer Employees & Intern

15 ! Citizens(of( HEWITT( City(Manager( Managing(Director( of(administration((17.5)( ( Library( Director((10.5)( City( Secretary((1)( Finance( Director((4.5)( Utilities( Director((13)( Community( Development( Director((4)( Human( Resources( Manager((1)( (! Finance( Assistant((1.5)( ( Court( Administrator( (1)( (! Court( Clerk((1)( (!! Building( Inspector((1)( ( Building( Development( Specialist((1)( ( Community( Development( Coordinator((1)( ( Customer( Service(Specialist(( (1)( ( Parks(&(Media( Coordinator((1)( ( Parks/Streets( Superintendent( (1)( ( Parks( Field(Assistants( (2)( ( Field( Technicians((2)( ( Parks(Crew( Leader((1)( ( Equipment( Operators((2)( (!!! Library( Manager((1)( Library( Supervisors((2)( Library( Administrative( Assistant((1)( Fire( Lieutenant((1)( (! Fire( Lieutenant((1)( Firefighters( (Shift(A)((4)(! Firefighters( (Shift(B)((4)(! Fire( Lieutenant((1)( (! Firefighters( (Shift(C)((4)( City(Council( Drainage( Crew(Leader((1)(! Assistant(Police( Chief((1)( (!! Criminal( Investigation( Division((3)( ( Patrol((18)( (!! Records(&( Administration( (3)( ( Communications( (6)( (! Animal( Control((1)( (! Code( Enforcement((1)( (! School(Resource( Officers((3)( Crew(( Leaders((2)(! Fire(Chief((16)( Chief(of(Police((37)(! Library(Clerks( (PT)((2.5)(! Library( Specialists((2)(! Library(Aid( (PT)((.5)(! Summer(Help( (.5)( Utility(Analyst( (1)( Street(&(Drainage( Specialist((1)( ( General(Services( Manager((1)( ( Drainage( Field(Assistants( (4)(! Summer(Help( (1)(! Parks(&(Streets( Equip.(Operator( (2)( ( Intern( (PT)((.5)( Customer( Service(Lead((1)( ( Field( Assistants((3)( (

16 Other Services

17 Contracted Services Street Sweeping and Slurry Seal Building Maintenance & Janitorial Services Irrigation & Herbicide Management Large Utility & Pavement repairs and projects

18 Contracted Services Professional Services related to Employee Benefits Legal, Engineering, & Surveying Professional Services Solid Waste Pick Up and Disposal IT & GIS Systems Management

19 FY Preliminary Budget Discussion OR How we pay for all of this

20 Availability of Data This presentation was made to the Hewitt City Council on Monday, July 2, 2018 Preliminary Tax Roll Data is latest available to City as of Monday, June 25, 2018 Certified Tax Roll is due from the McLennan Appraisal District on or before July 25, 2018 Assumptions are subject to change at any time based on new data - This is updated from the May 7 presentation

21 Budget Process Department Heads prepare and submit budgets Capital Improvement Project List Updated City Manager review with Departments Preliminary GF Budget Prepared for Council Discussion (Tonight)

22 Budget Calendar Certified Tax Roll from McLennan CAD - July 25 Council discusses budget, sets and holds public hearings Budget is updated per City Council Direction Council final consideration Monday, August 27, 2018

23 Duties and Responsibilities

24 Role of City Manager Advise Council of the financial condition and future needs of the city Make recommendations Prepare and submit to the Council an annual budget Appoint and remove any officer or employee of the city

25 Role of the Council Guide Budget Formation and Establish Policy Set Tax Rate and Hold Public Hearings Consider and Adopt Annual Budget Adopt Salary Schedule / Authorize Steps Consider Cost of living adjustment (COLA)

26 Budget Basics

27 What is a Budget? Policy Guidance Document Informs Public of Governmental Activities Financial Plan of City for upcoming Fiscal Year Fiscal Year runs from October 1 through September 30

28 A Budget Utilizes available data and facts Includes assumptions about the future of the city Includes historic data as well as estimates & projections Includes statistical data Current Budget Available Online

29 Budget Requirements Must be balanced Include an accounting of all known revenue sources Include an accounting of all known expenditures Includes a 90 Day Reserve (per policy) Adopted in accordance with State Law and City Charter

30 GFOA Award

31 Is this the Best use of our Resources?

32 Budget Funds General Fund Utility Fund (Water & Wastewater) Drainage Fund, Hotel Occupancy Fund (Restricted Use) Capital Improvement Project (CIP) Funds Interest & Sinking (Debt Service)

33 Tonight Focus on General Fund Some Discussion about Capital Improvement Projects Discuss Tax Rate Discuss Employee Compensation

34 Last Year Current FY Budget

35 Current Fiscal Year No Tax Rate Increase Significant cuts in all departments to balance budget NO new personnel were added Steps were Frozen Did NOT include cost of living adjustments (COLA)

36 Other Cuts Significant reduction in employee training Current Budget did NOT include new vehicles (ie. Police, Community Services, Inspections, etc ) Postponed expenditures

37 At the Same Time Fast growth environment in Hewitt Surrounding Development and Growth Increased Vehicular Traffic Volume on Aging Streets Increased Demand for Public Safety Services Increased Park and Recreational Usage Need for Drainage Facility Improvements

38 Employee Issues Competitive Marketplace Employee Compensation Staff Development and Professional Training Significant increase in cost of Heath Insurance led to city and employees paying more for same coverage Compete in market - people leaving for higher pay & better benefits

39 General Fund

40 General Fund The General Fund is the primary source of funding for general operations of the City Majority of ongoing expenses (approximately 79%) are for employee salaries and compensation Other expenses include fuel, electricity, chemicals, supplies, outside contracts, and equipment to perform services Debt Service is significant portion of GF expenses

41 GF City Departments Parks Library Streets Police Fire Public Safety Dispatch Finance & Administration Human Resources Planning & Development Inspections Animal Control Municipal Court

42 Other GF Expenses Electricity for Street Lights Health District Agreement Waco Animal Shelter & Humane Services Mowing of TXDOT Right-of-way Household Waste Partnership Keep Hewitt Beautiful

43 Sources of GF Revenue Ad Valorem (Property Tax) Sales Tax Franchise Fees Municipal Court Fees & Fines Development and Construction Permits Park Rental Fees and other fees for service

GENERAL FUND REVENUE SOURCES FY 17 18 BUDGET Transfer from

Reimbursement, Permit Fees, 1% 1% All Other, 1% Ad Valorem

44 GENERAL FUND REVENUE SOURCES FY BUDGET Transfer from UF, 11% Pcard Rebate, 1% Public Safety, 1% SRO Reimbursement, Permit Fees, 1% 1% All Other, 1% Ad Valorem M&O, 30% Franchise Fee Revenue, 10% Sales Tax Revenue, 24% Ad Valorem I&S, 20%

45 Ad Valorem Property Tax

46 Ad Valorem Tax Also known as Property Tax Tax levied on the value of property in City Largest Source of GF revenue FY Budgeted Revenue was $4,520,000 Almost 50% of GF Revenue was from Ad Valorem Tax

47 Sales Tax

48 Sales Tax Approximately 24% of the GF Revenue Tax paid on the purchase of goods Collected by State and reimbursed to City Hewitt receives 1 and half cents per every dollar spent Of that, 1/2 cent is dedicated to Property Tax Reduction

49 Sales Tax Estimates Hewitt has experienced an expanding commercial tax base Most commercial businesses collect Sales Tax (confidential) Hewitt budgeted $2.2M in current Fiscal Year

50 Sales Tax Anticipate Growth & New businesses (Cracker Barrel, Golden Chick, etc ) Budget must include an estimate for projected receipts FY projects this revenue to be $2.4M

51 Tax Roll Data General Fund

52 Tax Roll A list of properties and their values Values determined by the McLennan Appraisal District The State of Texas provides guidelines for appraisals Values based on Market Value of property see for more information

53 Appraisal District Sets Values Governing Body Sets Tax Rate

54 Property Tax Rate Largest Source of Funds for City s General Fund Tax Rate is set and adjusted by the City Council Funds ongoing Maintenance & Operations (M&O) Funds Debt Service also known as Interest & Sinking (I&S)

55 Property Tax Rate Same City Tax Rate since FY Currently $ per $100 of property value In 2017 the average home was valued at $169,793 For 2018 the average home is now valued at $186,698 Increased value of approximately 9.25% Note: For This Discussion, a City wide total assessed value of $935 Million is assumed

56 Other Taxing Jurisdictions

57 Current FY Tax Rates Without Exemptions ENTITY TAX RATE PERCENT MCC $ % MCLENNAN COUNTY $ % CITY OF HEWITT $ % MIDWAY ISD $ % TOTAL $ %

58 Other Tax Rates

59 Tax Year 2017 (FY 17 18) Comparison of Surrounding Tax Rates FY Tax Rate Comparison $1.55 $1.32 Homeowner with Hewitt's 20% exemption $.76 $.78 $.30 $.35 $.43 $.47 $.49 $.49 $.50 $.54 $.59 $.59 $.61 $.64 Based on 2017 Tax Rates, McLennan County Tax Assessor.

60 M&O and I&S

61 M&O vs I&S M&O is kind of like your regular home bills. Electricity, Gas, Food, recurring bills, etc VS I&S is kind of like your mortgage or car payment Fixed monthly payments based on how much you owe

62 Tax Rate Explained Property Tax Rate is actually calculated based on: Maintenance and Operation (M&O) Debt Service or Interest and Sinking (I&S) In cents went to M&O, 15.3 cents went to I&S In cents went to M&O, cents went to I&S

63 M&O vs I&S at current $ rate 0.4 C E N T S M & O I & S YEAR

64 New Debt

65 Series 2017 CO Issued in December 2017 Funds: Ritchie Road Reconstruction Aerial Fire Apparatus Emergency Radio System Other Street Projects Drainage & Parks Improvements Will result in an additional $374,061 debt payment next year

66 Debt Service For FY The Total GF I&S Payment will increase to $2,175,898 It was noted at the time of issuance, and even since that time, that a tax rate increase would be needed to fund this new debt

67 Debt Service No matter what else happens with the Budget, the City is obligated to pay an additional $374,061 in FY for the 2017 Debt Issuance This means, without a tax rate increase, the I&S percentage of overall tax rate going to Debt will rise and the percentage going to M&O will decrease

68 Preliminary Tax Roll Shows an increase in values close to 9.25% Average Home Value is estimated at $186,698 At the CURRENT Tax Rate this will generate approximately $5,022,932 in total revenue Appraised Value of City is now $935M This will change with ARB settlements and other data

69 Effective vs Rollback The CURRENT Tax Rate is literally the same tax rate we already have in the current Fiscal Year The ROLLBACK Tax Rate is the tax rate that is the maximum amount a taxing entity could set that would not be subject to a petition of the voters to rollback the tax rate. This basically represents an 8% increase in the M&O portion of the tax rate.

70 Tax Rate Tax Rate is calculated based off the new values from Preliminary Tax Roll Based on a new value TOTAL value of $935M CURRENT Tax Rate $ ROLLBACK Tax Rate $

71 Under Rollback Rate Again, using a total valuation of $935M Average Home Value is estimated at $186,698 At just under the ROLLBACK Tax Rate this will generate approximately $5,270,381 in new revenue versus FY Budgeted amount This is a difference of $247,449 between the amount of revenue that would be generated at the CURRENT tax rate vs the Under Rollback Rate

72 Average Homeowner

73 Average Hewitt Resident $186,698 average 2018 home value per appraisal District Household Median Income is $73,984* 31.16% of households have income greater than $100,000 * 36.2% have a bachelors degree or higher* *Source: Greater Waco Chamber of Commerce & McLennan County Appraisal District

74 New Values are out Again, the Average Home Value in Hewitt is $186,698 About 75% of Hewitt Homeowners have the 20% Homestead Exemption At the CURRENT Tax Rate ($ ), and with the Homestead exemption, the Average Hewitt Resident would pay $67.17 per month for Hewitt City Services This amounts to $ in City taxes per year.

75 Tax Rate Increase Assuming a rate under ROLLBACK of $ Using the same data, that same average Hewitt resident with a Homestead exemption would pay $70.50 per month for Hewitt City Services This amounts to about $846 per year That s would amount to a tax increase of $3.33 per month for the average Hewitt homeowner

76 Other considerations If a resident has a larger home that has a higher appraised value they would pay more in taxes Values did go up about 9.25% from year to year Therefore, overall taxes will too

77 Last year s Average Average Homeowner with Homestead paid about $61 per month to Hewitt for City Services So, year to year, since the home values went up about 9.25%, the taxes that would be paid at the CURRENT rate would go up too. Comparing year to year, the difference per month is $6 per month at the CURRENT rate or about $9.33 per month at the under Rollback rate.

78 Things to think about A homeowner may only claim one house as their homestead to be eligible to receive the 20% Homestead Exemption Increased Home Values does equate to paying more taxes assuming the tax rate remains the same But, most people DO want the value of their home to increase over time Again, the new CO issuance and Debt Service is a large part of FY budget expenses

79 City Employees

80 Last Year Recap No New Employees No New vehicles Significant cuts to funding for employee training No annual Step for Employees

81 Recap 5 Employees have not had a raise since October 2016 No Cost of Living Adjustment for Employees Insurance premiums for employees went up Most Employees actually brought home less money in October of 2017 since there was no COLA or Step and the monthly insurance premium increased

82 Unemployment Data from US DOL Bureau of Labor Statistics May 2018 Unemployment for Waco area is 3.4% Unemployment is the number unemployed as a percentage of the labor force. A low unemployment rate leads competition for the needed labor force, often causing higher wages and/or better benefits

83 Highly Competitive Market Since employees were informed of no raises and higher insurance costs in August of last year (10 months ago), 8 employees have resigned For comparison, prior to August of last year from January 1, 2016 to July 31, 2017 (19 months) only 7 employees resigned. City is experiencing a difficult time filling our current vacancies with quality applicants.

84 Searching for Jobs It is reported by the Department Heads that there are currently ten (10) or more employees that have confirmed they are actively searching for other employment. We have around 104 permanent positions, so these 10 (that we have heard about) combined with the 8 employees that have already resigned are a significant percentage of our workforce. Pay and Benefits are the primary reason employees cite when leaving Hewitt

85 Terminations These numbers do not include employees terminated or employees that retired from the City. Terminations often occur due to failure to meet probationary standards and are frequently because of a low-quality applicant pool. In the past 10 months, we have terminated five employees (in addition to the 8 resignations). Four of the five employees terminated were still in their probationary period, and the fifth had only been out of probation for three months.

86 Applicant Costs Advertisement Recruitment Testing Background Checks Interviews Police Academy (for specific police recruits)

87 Cost of Turnover Sunk cost of Training (ie. training grounds for other employers) Lost Years of Experience (YOE) Equipment Cost (ie. Uniforms and Train new people

88 Public Safety Analysis SUMMARY&OF&ESTIMATED&LOSSES&FOR&PUBLIC&SAFETY&(Last&5&Years) Money&Lost with&each Police&Officer Officers&Lost&in& Last&Five&Years TOTAL&LOSS&FOR& POLICE&OVER& LAST&5&YEARS Average&YOE&with& City&of&Hewitt&for& Officers&Lost Officers&Lost&in& Last&Five&Years TOTAL&YOE&with&CITY&OF& HEWITT&LOST&FOR&POLICE (OVER&LAST&5&YEARS) $30, $243, Money&Lost with&each Firefighter Firefighters&Lost& in&last&five&years TOTAL&COST&FOR& FIRE&OVER LAST&5&YEARS Average&YOE&with& City&of&Hewitt&for& Firefighters&Lost Firefighters&Lost&in& Last&Five&Years TOTAL&YOE&with&CITY&OF& HEWITT&LOST&FOR&FIRE (OVER&LAST&5&YEARS) $19, $138,

89 Salaries & Raises

90 Long Term Strategy Hewitt s employees deliver a high level of service to our citizens The City Manager and Department Directors have consistently requested raises for employees and increased salaries every year. Overall compensation is of upmost importance in attracting and retaining high quality employees

91 Long Term Strategy Efficient Operations require quality employees Opportunities for advancement and ongoing training Competitive Salaries and Wages Decrease Employee turnover to lower costs (Not a training ground for other cities)

92 We don t have to pay the most to be an employer of choice and a great place to work.

93 Operation Renovation Want to be a great place to Work 6 Week Organizational Culture Training Session Invited Key Staff and City Council Open Dialogue concerning workplace morale Employees were encouraged to be Honest and provide Feedback about issues employees face

94 City Employees City Employees were concerned that we should not lower our standards for new hires Employees felt it was mission critical that compensation and benefits should be competitive with the overall market

95 Staffing & Salaries During Recent Employee Culture Training, Employee Pay and Benefits (Resources) was cited as the top priority for City Employees Opportunities for Training and Advancement were also a top priority Employees wanted a Master Plan to guide future decisions and wanted to focus on long term goals and objectives to improve the quality of life for Hewitt citizens

96 Salaries All employees are paid according to their position (job duties and scope of responsibility) and the City s Salary Schedule. Salary Survey is conducted annually for comparison purposes

97 Raises Annual Step Increase Cost of Living Adjustment (COLA) Promotions - associated with additional Duties & Responsibilities Salary Market Adjustments - salary survey

98 Average Salary Right now, the average salary of Full Time Hewitt City Employees is $46,814 Including Part Time Employees, this drops to $44,186

99 Salary Survey Annual Salary Survey of other Cities Conducted annually by city staff Data has been provided to City Council

100 Salary Survey Comps Waco Killeen Temple Belton Harker Heights Taylor Live Oak Kerrville Schertz Brenham Cleburne Sachse McLennan County

101 Market Based Salary Adjustments Was updated since that time Survey data now includes Woodway, Robinson, Stephenville, Terrell, Red Oak, Katy, Leander, Mexia, Cibolo, Bellmead, Hutto, Corinth, Sulpher Springs, Saginaw, Burleson, Southlake, Murphy, Midlothian, Palestine, Converse, Wylie, Waxahachie, Benbrook, Crowley, Fredericksburg, Corsicana, & Hillsboro

102

103 Preliminary Budget

104 Documents Still Collecting and Analyzing Data Preliminary Budget Numbers in Council Packet Includes Department Requests Includes two (2) versions

105 Preliminary Budget Summaries for General Fund Only Subject to change Includes Departmental Requests Sales Tax is estimated to be $2.4M Includes provision for SRO and new Police Recruit

106 Vehicles Did not acquire new vehicles last year - Playing Catch Up Developing a plan to replace 11 vehicles with 9 Seeking Efficient operations to reduce fleet costs Evaluating two procurement methods - $50,000 Enterprise Fleet Services VS Traditional Lease Purchase Finalizing Cost Estimates - NOT included in either Budget

107 New Police Officers Additional SRO position New Police Recruit position funded Jan 1, 2019 Totals $97,436 for these two positions SRO - $56,741 Recruit - $40,695

108 GF - Budget Rev 1 Based on CURRENT Tax Rate $ Would Generate Approximately $5,022,932 in Revenue Does NOT include Employee Raises of any kind Does include 2 new employees for Police Department

109 GF Budget Rev 2 Based on tax rate (Under Rollback) of $ Would generate approximately $5,270,381 in revenue Includes Employee Steps and 3% COLA for all employees Does include 2 new personnel for Police Department Would generate $247,449 more than Rev 1

110 Other Considerations Steps + COLA Total Approximately $221,000 Other Salary Adjustments & Promotions $50,000 Higher wage increases for Fire & Police Employees with increased duties and responsibilities Finance Department Position - $50,700 Legal Fees??

111 Rev 1 vs Rev 2 Current Tax Rate $ $5,022,932 Under Rollback Rate $ $5,270,381 $247,449 difference

112 Line Item Review

113 Next Steps

114 Public Hearings Scheduled Per Budget Calendar Require a legal notice Once the notice is published, the FINAL Tax Rate can be no higher than the rate published in the notices

115 Tax Notice The City Council of Hewitt, Texas will hold a public hearing for consideration of the FY General Fund, Utility Fund, Drainage Fund, Hotel Fund and Capital Improvement Fund Budgets on August 6, 2018 at 7:00 p.m. in the Hewitt City Hall, 200 Patriot Court.

116 Tax Notice This budget will raise more total property taxes than last year s budget by $733,557 (16.2%) and of that amount $206,832 is tax revenue to be raised from new property added to the roll this year. And of that amount $374,061 is tax revenue raised to service new debt. A copy of the budget may be examined at the City Hall, the library and on the city website

117

PROPOSED ANNUAL OPERATING BUDGET CITY OF ATHENS TEXAS FISCAL YEAR 2017

PROPOSED ANNUAL OPERATING BUDGET CITY OF ATHENS TEXAS FISCAL YEAR 2017 BUDGET HIGHLIGHTS BUDGETED FINANCIAL RESERVE (SAVINGS) EQUAL TO 60 DAYS OPERATING EXPENSES, OR $1,790,434 FOR SECOND YEAR IN A ROW