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HomeMy WebLinkAboutMinutes_GGAF_03.04.2009Notice of Meeting of the General Government and Finance Advisory Board and the Governing Body of the City of Georgetown, Texas Wednesday, March 4, 2009 The General Government and Finance Advisory Board will meet on Wednesday, March 4, 2009 at 01:30 PM in the City Hall Main Floor Conference Room, located at 113 East 8th Street, Georgetown, Texas If you need accommodations for a disability, please notify the city in advance. General Government and Finance Advisory Board Members: Keith Brainard-Chair, Patty Eason, Dale Ross General Government and Finance Advisory Subcommittee meets at least quarterly or as needed at the request of the Chair. Call to Order at 01:30 PM Board may, at any time, recess the Regular Session to convene in Executive Session at the request of the Chair, a Board Member, the City Manager, Assistant City Manager, City Council Member, or legal counsel for any purpose authorized by the Open Meetings Act, Texas Government Code Chapter 551, and are subject to action in the Regular Session that follows. Welcome/Call to order1. Approval of minutes from February 12, 2009 meeting 2. Review of the 2008 Longevity Report as requested3. Presentation – 2009 Debt Overview4. Discussion and possible action to recommend approval of the 2009 bond program5. Presentation of criteria used to award professional services contracts – Terry Jones6. Adjourn7. Certificate of Posting I, Jessica Hamilton, City Secretary for the City of Georgetown, Texas, do hereby certify that this Notice of Meeting was posted at City Hall , 113 E. 8th Street,a place readily accessible to the general public at all times, on the _____ day of _________________, 2009, at __________, and remained so posted for at least 72 continuous hours preceding the scheduled time of said meeting. __________________________________ Jessica Hamilton, City Secretary L:\Division\finance\Share2\GGAFSub\GGAF Meetings\2009\3.4.09\Minutes\Minutes 3.4.09.doc MINUTES GENERAL GOVERNMENT AND FINANCE (GGAF) ADVISORY SUBCOMMITTEE OF THE CITY OF GEORGETOWN, TEXAS The General Government and Finance (GGAF) Advisory Subcommittee met at 1:30 p.m. on Wednesday, March 4, 2009, in the City Hall Main Floor Conference Room, located at 113 East 8h Street, Georgetown, Texas. 1. Keith Brainard welcomed everyone to the meeting and called the meeting to order at 1:38 p.m. 2. Approval of minutes from February 12, 2009 meeting. Discussion on how to communicate information to the Council from this committee. The decision to make the minutes available to Council by posting them on the website (to ensure members can easily understand what the committee is doing) would be sufficient. Nothing that this committee does precludes what the Council does or decisions they make. The purpose of this committee is only to take a closer look at certain issues, ask questions and provide further information or direction if needed. Clarification: Refer to “Keith” instead of “Mr. Brainard”. On the issue of longevity, change sentence to: Keith has a problem with paying “longevity” to employees after one month of employment. His concern is calling it “longevity” (suggestion would be to call it “bonus” or “morale booster”). Clarification: Patty said that she also suggested setting up educational meetings to try and involve more employees and to get more employees interested in the 457 plan. The minutes were approved with the above clarification and changes. Members Present: Keith Brainard, Chair, Patty Eason, Dale Ross Members Absent: None Staff Present: Micki Rundell, Director of Finance and Administration, Kevin Russell, Human Resources Director, Leticia Zavala, Controller, Finance and Administration, Terry Jones, Facilities (Finance & Administration) L:\Division\finance\Share2\GGAFSub\GGAF Meetings\2009\3.4.09\Minutes\Minutes 3.4.09.doc 3. Review of the 2008 Longevity Report as requested: Micki went over the Longevity Report (this item was requested at the February 12 meeting). She explained that slightly less than 1/2 of the employees are in the 1-4 year category. There are 67 employees that have 15+ years and these employees are mostly the department heads and managers. Keith asked to change the category 1-4 years to 0-4 years and provide this information to the rest of the Council. 4. Presentation – 2009 Debt Overview: Micki gave a brief overview and explained that this will be presented to entire Council at workshop on Monday, March 9th. This is done annually as a part of the annual debt process to inform Council on what the debt is, what the debt mixture is, etc. She explained that all self supporting debt (GTEC, Airport, Stormwater, GEDCO, etc.) all have to have times coverage. The required is 1.35 times coverage; internally, we have 1.5 times coverage and believe this is a prudent method so that there is never a downturn in the sense that we wouldn’t ever be able to not make the debt payments. We do not ever want that to go back on the tax side. Dale asked for an explanation on the City’s bond rating upgrades. He asked if it was a function of what the City was doing, or if it was due to the way the rating agencies have changed the way they do the evaluation. Micki explained that our bond rating went up before they changed the rating criteria. She said that we could possibly get an additional upgrade due to this change. They will visit with the bond rating agencies when they go on the bond rating trip at the end of March about the unfair advantage some of the other cities have received due to the evaluation change. This upcoming bond issue, we will be getting ratings from Standard and Poors and Fitch. Moody’s will not be included because of the concerns about how they have rated some of the bonding insurances and there are questions in the market about that so the recommendation is not to use Moody’s at this time. We are one of only two utilities in the state that has an electric utility with a AA - rating. We have an AA rating on the GO side, but the AA- rating on the utility side is fantastic, considering that we have an electric utility and with the uncertainties in the electric market deregulation, it makes getting upgrades on the utility side very, very difficult. We are very proud of this rating and it speaks well of what Jim Briggs does on managing the electric power contracts ensuring that we always have cost effective, reliable energy. Tax supported bonds in this issue: $1.1 GO part of road bonds:  Procurement of right-of-way Maple Street extension at SE1  DB Woods (engineering for Williams Drive widening)  We are only issuing amount Jim feels we will spend in the next 9 months  $5.4M CO’s included  $3.9M to reimburse cost of the Albertson’s building  $1.5M is the first payment to the County; realizing debt service is paid by GTEC for the first 5 years The impact on next year’s tax rate will be less than $0.01 L:\Division\finance\Share2\GGAFSub\GGAF Meetings\2009\3.4.09\Minutes\Minutes 3.4.09.doc The steps for bond issuance will be: March 24 Council will be asked to approve the CO Notice of Intent (required within 30 days after reading the Ordinance). It doesn’t lock us in, but it doesn’t allow us to go over the $5.4M. March 30-31 Bond Rating Trip. Jim, Paul, Micki and Mayor Garver will go and meet with the rating agencies April 28 1st Readings (State law requires only one reading) of GO, CO and Revenue Bond Ordinances May 21 Bonds will close and we will have funds in hand Keith thanked Micki for the presentation and all of the work she put into it. 5. Discussion and possible action to recommend approval of the 2009 bond program: The committee is not comfortable making a recommendation. They are comfortable with what they have heard in the presentation. 6. Presentation of criteria used to award professional services contracts – Terry Jones Terry Jones presented handouts, forms and information that the City uses when soliciting for architectural or Construction Manager at Risk services. He noted that this process could probably be used for selection of engineering services as well. Points of interest:  The first step in the process is to issue a Request for Qualifications (RFQ).  The selection committee (key staff and project manager or using department and sometimes Council members) individually read the RFQ’s (Patty reminded everyone that the reviews are done separately and not with everyone together in a room).  Selection committee compares evaluations and rate firms based on criteria established; committee selects maximum number of firms to interview.  Interviews are set up.  Reevaluate firms based on the interview.  Terry checks the references so that they are checked consistently by one point of contact; there are about15 to 20 questions.  Terry tabulates scores and committee develops a consensus on recommendation to Council.  The high score and low scores are thrown out and the rest are averaged. Dale said that we owe it to the public for the process to be pure and he was very comfortable that it was a fair process. He noted that this is good because the bidders are informed of the scoring system ahead of time and with the number of evaluators, there is no reason for anyone to think that it isn’t a fair process.  Terry noted that there cannot be a local preference with architectural selections, although it is difficult to work with out of town architects due to the availability. With the CM at Risk, we have the option to choose the subcontractors.  State law does not permit us to consider price when selecting professional services.  Patty said that based on previous experience on selection committees, it is important to go by qualifications for specific projects (i.e. you don’t want to go by pricing alone for building a dam).  Professional services include architects, attorneys, engineers, accountants, financial advisors, etc. L:\Division\finance\Share2\GGAFSub\GGAF Meetings\2009\3.4.09\Minutes\Minutes 3.4.09.doc  We do solicit specialization architects who have experience designing similar public-type facilities such as Libraries, Recreation Centers or Police Stations.  Round Rock is sometimes considered “local”.  Dale read some economic development information recently and noted that out of every dollar spent, if you use a local company, 46 cents stays in the community and if you use a national chain, only 17 cents is retained locally.  Dale thanked Terry for the presentation and said when things are presented to Council, he now has a much better understanding. Everyone was very appreciative of the bond overview and the information provided by Terry Jones. In regard to budget items, the committee decided that in fairness to the other colleagues, they will just look at them at the Council level. 7. Meeting adjourned at 2:33 p.m. Minutes of the Meeting of General Government and Finance Advisory Board and the Governing Body of the City of Georgetown, Texas Wednesday, March 4, 2009 The General Government and Finance Advisory Board of the City of Georgetown, Texas, met on Wednesday , March 4, 2009 presiding. Board Members Present: Keith Brainard-Chair, Patty Eason, Dale Ross Board Members Absent: Staff Present: Micki Rundell, Chief Financial Officer, Leticia Zavala, Controller, Kevin Russell, Human Resources Director, Terry Jones, Construction Manager, Danella Elliott, Recording Secretary Minutes Regular Meeting Board may, at any time, recess the Regular Session to convene in Executive Session at the request of the Chair, a Board Member, the City Manager, Assistant City Manager, City Council Member, or legal counsel for any purpose authorized by the Open Meetings Act, Texas Government Code Chapter 551, and are subject to action in the Regular Session that follows. Welcome/Meeting called to order at 1:38 pm by Keith Brainard, Chair1. Approval of minutes from February 12, 2009 meeting 2. The General Government and Finance (GGAF) Advisory Subcommittee met at 1:30 p.m. on Thursday, February 12, 2009, in the City Hall Main Floor Conference Room, located at 113 East 8h Street, Georgetown, Texas These minutes were approved at the March 4, 2009 GGAF Advisory Subcommittee meeting with the following clarification and changes. Discussion on how to communicate information to the Council from this committee. The decision to make the minutes available to Council by posting them on the website (to ensure members can easily understand what the committee is doing) would be sufficient. Nothing that this committee does precludes what the Council does or decisions they make. The purpose of this committee is only to take a closer look at certain issues, ask questions and provide further information or direction if needed. Clarification : Refer to “Keith” instead of “Mr. Brainard”. On the issue of longevity, change sentence to: Keith has a problem with paying “longevity” to employees after one month of employment. His concern is calling it “longevity” (suggestion would be to call it “bonus” or “morale booster”). Clarification : Patty said that she also suggested setting up educational meetings to try and involve more employees and to get more employees interested in the 457 plan. Discussion and direction to staff regarding the scope of items to be reviewed by the Subcommittee. Keith Brainard explained that the Charter provides a listing of items that the committee should plan to address. There are a lot of expenditure items that go to Council that are not overseen by a subcommittee. The committee discussed what needs to be reviewed before going to Council. Discussion : They do not want to see everything. Purchases for equipment such as vehicle purchases (because it is part of facilities), as well as, major contracts or projects such as the animal shelter remodel or parking lots are seen at the Council level and committee members do not want to see these items prior to going to Council. Items to be brought before the GGAF Subcommittee are financial related contracts, bond issues and major expenditures (play it by ear as to what constitutes “major”). Micki explained professional contracts $15,000 and over, materials $25,000 and over up to $50,000 are on consent. Expenditures $50,000 and over are placed as a regular item on the agenda. They have no problem with thresholds approved during the budget process. MIcki explained about the IT Steering Committee. It is a cross divisional group of key infrastructure users charged with creating a “Master Plan” for IT in helping determine direction for technology. The City is getting ready to make some major decisions and large purchases to replace the CIS and CAD systems. The committee is going to make sure it is efficient and mandate and develop a strategy. An RFP is going out next week to hire a consultant and do an assessment of our technology. Since IT falls under the purview of general government, Micki asked how much involvement the committee wanted to have regarding the contract. The committee feels they do not have the expertise to be involved in the choices, but wanted to be kept abreast of what was going on through e-mail or sharing paperwork . Compensation and Benefits Discussion : Mr. Brainard wanted to plant the idea of giving the employees an inducement to not use their sick leave, such as paying 1/4 or 1/2 of their sick leave upon termination so that they may be less inclined to “use it or lose it”. Mr. Ross thought having PTO (Paid Time Off) instead of Vacation or Sick days would make employees less likely to “lie” about being off to save their sick leave. Longevity: Mr. Brainard has a problem with paying longevity to employees after one month of employment. He believes we should pay employees fairly and what they are worth, but one month does not constitute longevity. Micki explained the history of the longevity payments. Local Government Code also requires that Public Safety be awarded longevity pay and most cities have elected to pay all employees so that there is no appearance of discrimination. Mr. Brainard would like to see it be performance based rather than just showing up for work. He asked for figures on Public Safety and Non-public Safety, broken down into groups (i.e. 0-4 years, etc). Micki said she would break it down by department also. Review and recommendation to staff regarding the selection of the City’s Investment Advisory service. Leticia Zavala explained the bidding and advertising process for selection of the Investment Advisory Service. We use on-line bidding software, look at previous bidders and send them the link, and we are required to publish it in the paper. There were 4 responses and any one of them could an adequate job. The deciding factor was cost. Bidders were asked to include what their costs would be both per trade and fixed cost. Discussion on how the evaluation grid point system is determined. Mr. Brainard and Mr. Ross stated that the 10 points for previous relationships seems unfair. Patty Eason said that it wasn’t always an advantage. It could keep an inadequate company from getting another job with the city if they performed poorly in the past. Mr. Ross said it was all about process, and he would like to make sure to give the appearance of a fair process and there could be no biases for any particular firm or individual. Micki was asked to use her best judgement to re-evaluate the grading system and break it down to include quality of personnel Mr. Brainard is uncomfortable with the previous relationship point system and would like to see some criteria grid for quality of personnel. Micki explained the difference between the Investment Advisory service and our Financial Advisor. The committee is comfortable going with the recommended firm of Valley View Investment Services. For an informative item on the next agenda, Micki will bring criteria for the different types of contracts, as different contracts require different detailed criteria and invite Terry Jones to explain the process taken in the past. Review of the City’s 457 plan administrator and possible recommendation to City Council regarding approved City 457 plan administrators. Kevin Russell explained that we do not have a 457 plan. The City is a plan sponsor and we participate in ICMA’s 457 plan. We basically contract with people to provide us with a plan and administration. There is no cost to the City so there is no requirement for a bidding process when adding providers. The City has previously had only one plan and this year we are trying to offer employees another plan and provide that as an option. Nationwide has agreed to come and do a presentation as a possible new provider. Micki noted that this is a pass-through program and the City has no financial responsibility. Mr. Brainard said that it is our fiduciary responsibility to provide employees with a cost effective plan that works to their benefit and would like to bid out this service so that each provider will possibly sharpen their technology. There are varying levels of service, depending on the provider. Patty Eason suggested that we get more information out to the employees and have meetings to find out what they actually want. Dale Ross would like to know what is available out there and the cost. It is all about the value of the proposition and what you are getting for your dollar. Mr. Brainard said that if we bid this service, we can change the contract and require that the employees will be able to keep the same type of funds they currently have, they will just transfer to the new provider “as is” with no cost to the employee. Mr. Brainard thinks the employees are currently not getting a great deal regarding the portion of their contribution going to administrative fees each month. The best way to find out what the best deal is in terms of price and service is to bid it. Mr. Brainard has been through this process before and realizes that each company will “sharpen their pencils” to provide the best deal to obtain the business. To just automatically give it to a specific company will not require them to sharpen their technology or try to provide anything better for the employees. Mr. Ross said that in any organization, the most valuable asset is the people and we need to do our best to keep the talented employees. Mr. Brainard’s hope is that by January 1, 2010, the City will have auto enrollment for all new hires and the City will make matching contributions. Mr. Brainard will provide “off the shelf” sample contracts to put together an RFI to send out. After receiving the qualifications and information, Patty Eason would like to get a group together and involve employees and get their input. Also, they would like to get a group of employees who are already participating in a 457 plan to identify things they like or don’t like about their existing service. Discussion and direction to staff regarding monthly and quarterly financial reports, to include format and content. After discussion, the committee would like for the monthly reports to include: Fast Facts , to include: Variance reports (with an additional line added with explanations and with the difference calculated) Weighted average earnings rate Average cost of bonded debt Unobligated funds (i.e., after a reduction in a budgeted item, explanation of what these excess funds can be used for) Brief narrative overview Updated on projects with exceptions included Completed projects Building permits and “wildcard” graphs The targeted goal for the report to be completed and distributed to the committee, Paul Brandenburg and Council is by the 3rd week of the month. Determine future meeting dates of the Subcommittee. The committee decided that they will meet no less than quarterly and there is no need to set a date for a future meeting at this time. If the committee needs to meet to discuss an item, a meeting will be set with a time limit. Mr. Brainard asked Micki to share the bond information with the committee before it goes to Council and they will decide if a meeting should be set. Mr. Brainard would like to be updated periodically through e-mail or phone calls. The February 12, 2009 meeting adjourned at 3:05 p.m. Review of the 2008 Longevity Report as requested1. Presentation – 2009 Debt Overview2. Discussion and possible action to recommend approval of the 2009 bond program3. Presentation of criteria used to award professional services contracts – Terry Jones4. Adjourn5. Adjournment The meeting was adjourned at 02:33 PM. Approved :Attest: _______________________________________________ Board Member Name Secretary