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HomeMy WebLinkAbout01-Introduction & OverviewAustin Dallas/Fort Worth San Antonio Lubbock El Paso Amarillo Houston Georgetown Location Georgetown is the northern most “gateway” to the gently rolling hills of Central Texas. While Georgetown offers the amenities and charm of a small community rooted in values of days gone by, it’s strategically and centrally located in the middle of the four major metro- politan areas of Texas. Austin is 26 miles south, Dallas is two hours north, Houston is two hours southeast and San Antonio is just one-and-a-half hours south, placing Georgetown in a very advantageous position for cultural and economic develop- ment. Traveling to and from Georgetown is easy, as it is at the crossroads of IH-35 going north/south and State Highway 29 going east/west. Access to Georgetown via the Austin-Bergstrom International Airport was made much easier with the recent opening of State Highway 130, a new toll road from Georgetown to San Antonio that parallels IH-35. ANNUAL OPERATING PLAN ELEMENT OF THE GEORGETOWN CENTURY PLAN GEORGETOWN, TEXAS Fiscal Year October 1, 2007 through September 30, 2008 MAYOR Gary Nelon MAYOR PRO TEM Gabe Sansing District 2 COUNCIL MEMBERS Patty Eason District 1 Keith Brainard District 3 Bill Sattler District 4 Pat Berryman District 5 Farley Snell District 6 Ben Oliver District 7 CITY MANAGER Paul Brandenburg ASSISTANT CITY MANAGERS Tom Yantis Jim Briggs DIVISION DIRECTORS Randy Morrow Community Services Micki Rundell Finance & Administration Anthony Lincoln Fire Department David Morgan Police Department CITY ATTORNEY Patricia E. Carls Carls, McDonald & Dalrymple, LLP - The Government Finance Officers Association of the United States and Canada (GFOA) presented an award for Distinguished Budget Presentation to the City of Georgetown for its annual budget for the fiscal year beginning October 1, 2006. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communications medium. The award is valid for a period of one year only. The City of Georgetown has received the Distinguished Budget Presentation Award for the last eighteen consecutive years. We believe our current Operating Plan continues to conform to program requirements, and we are submitting it to GFOA to determine its eligibility for another award. Mission Statement To preserve and enhance the quality of life and unique character of Georgetown by: Preserving the rich heritage and natural resources; Promoting well-planned development, cost- effective professional management and competent, friendly services; and Protecting its citizens, the environment and all other assets. Table of Contents Councilmembers Budget Award Mission Statement Table of Contents OVERVIEW Transmittal Letter.................................................................................................................... i CITY SUMMARY Georgetown Century Plan Georgetown’s Long-Term Planning Process...................................................................... 1 Council Priorities and Strategies Linked to the Century Plan........................................... 3 Budget Adoption and Management Process..................................................................... 12 Annual Operating Plan Preparation ................................................................................... 14 Organizational Chart............................................................................................................ 15 Community Profile............................................................................................................... 16 Georgetown – Then and Now ............................................................................................. 18 FINANCIAL SUMMARY City Operations by Fund ..................................................................................................... 19 City Operations by Fund / by Division ............................................................................... 20 Budgeted Revenues............................................................................................................. 21 Budgeted Expenses by Division......................................................................................... 22 Budgeted Expenses by Program........................................................................................ 23 Revenues.............................................................................................................................. 24 Fund Summaries.................................................................................................................. 34 COMMUNITY DEVELOPMENT DIVISION Division Financial Summary............................................................................................... 51 Code Enforcement...............................................................................................................52 Building Inspections............................................................................................................ 54 Geographic Information System......................................................................................... 56 Housing and Neighborhood Development........................................................................ 58 Planning................................................................................................................................ 60 COMMUNITY SERVICES DIVISION Division Financial Summary............................................................................................... 63 Convention and Visitors Bureau ........................................................................................ 64 Main Street............................................................................................................................ 66 Public Library....................................................................................................................... 68 Parks ..................................................................................................................................... 70 Recreation ............................................................................................................................ 72 FINANCE & ADMINISTRATION DIVISION Division Financial Summary............................................................................................... 75 Administration...................................................................................................................... 76 Accounting ........................................................................................................................... 78 Municipal Court.................................................................................................................... 80 Purchasing............................................................................................................................ 82 Facilities Construction and Maintenance.......................................................................... 84 Fleet Management................................................................................................................ 88 Utility Office.......................................................................................................................... 92 FIRE DIVISION Division Financial Summary ...............................................................................................95 Administration......................................................................................................................96 Operations ............................................................................................................................98 GEORGETOWN UTILITY SYSTEMS DIVISION Division Financial Summary .............................................................................................101 Administration....................................................................................................................102 Energy Services .................................................................................................................104 Systems Engineering.........................................................................................................112 Water Services....................................................................................................................114 Sanitation............................................................................................................................120 MANAGEMENT SERVICES DIVISION Division Financial Summary .............................................................................................123 City Council ........................................................................................................................124 City Manager’s Office.........................................................................................................126 Airport .................................................................................................................................128 Economic Development.....................................................................................................130 General Government Contracts........................................................................................132 Human Resources..............................................................................................................134 Information Technology ....................................................................................................138 Legal Contract....................................................................................................................142 POLICE DIVISION Division Financial Summary .............................................................................................143 Administrative Services Bureau.......................................................................................144 Field Operations Bureau....................................................................................................146 Support Services Bureau ..................................................................................................148 Animal Services..................................................................................................................150 TRANSPORTATION DIVISION Division Financial Summary .............................................................................................153 Administration....................................................................................................................154 Stormwater Drainage.........................................................................................................156 Streets.................................................................................................................................158 CAPITAL PROJECTS Capital Projects & Five Year Plans...................................................................................161 DEBT Debt Management & Policy...............................................................................................217 Outstanding Debt Summary..............................................................................................218 Outstanding Debt by Type.................................................................................................219 General Debt Service.........................................................................................................220 Utility Debt Service.............................................................................................................222 Utility Revenue Bond Coverage........................................................................................223 Proposed Debt Issues........................................................................................................224 GTEC Debt Service (Blended Component Unit – for Reference Only)..........................225 STATISTICAL Miscellaneous Statistical Data.......................................................................................... 227 Key Indicator Graphs......................................................................................................... 228 Benchmarking Graphs ...................................................................................................... 230 Certified Property Value.................................................................................................... 232 Certified Taxable Assessed Values.................................................................................. 233 Tax Rates Property Tax Rate Comparison........................................................................... 234 Combined Tax Rate – City of Georgetown......................................................... 234 Total Combined Tax Rate Comparison............................................................... 235 Sales Tax Revenue Analysis............................................................................................. 236 Tax Revenues Ten Year History ................................................................................................... 237 Combined Sales and Property Taxes.................................................................. 237 Population .......................................................................................................................... 238 Georgetown’s Top Ten...................................................................................................... 238 Utility Customer Growth.................................................................................................... 240 Utility Revenues................................................................................................................. 241 REFERENCE Fiscal and Budgetary Policy............................................................................................. 243 Financial Ratio Comparisons ........................................................................................... 266 Contingency Reserve Requirements Worksheet............................................................ 268 Personnel Summary by Division 2005-2009.................................................................... 269 Personnel Summary – FTE’s ............................................................................................ 270 Personnel Summary – New Positions Added ................................................................. 271 Program Summary by Fund.............................................................................................. 272 Transfers Between Funds................................................................................................. 275 Internal Service Premiums................................................................................................ 276 Utility Rate Schedule......................................................................................................... 278 Ordinances......................................................................................................................... 282 GEDCO Budget (for information only)............................................................................. 292 GTEC Budget (for Information only)................................................................................ 293 Advisory Boards & Commissions.................................................................................... 294 ACRONYMS / GLOSSARY / INDEX Commonly Used Acronyms.............................................................................................. 299 Glossary.............................................................................................................................. 301 Index.................................................................................................................................... 307 Overview Overview Table of Contents Transmittal Letter from the City Manager.................................................................................................i Budget Process..........................................................................................................................ii Priority Goals and Strategies Division Responsibility................................................................iii Budget Overview.......................................................................................................................iv Property Taxes/Property Values/Utility Rates............................................................................v Sales and Use Taxes................................................................................................................vi Budget Highlights.....................................................................................................................vii Capital Projects.........................................................................................................................ix Financial Highlights....................................................................................................................x Conclusion................................................................................................................................xii October 1, 2007 To the Honorable Mayor Nelon, Members of the City Council and Citizens of Georgetown: We are pleased to present to you the adopted Annual Operating Plan Element (Operating Plan) of the Georgetown Century Plan for 2007/08. The Georgetown Century Plan is the comprehensive strategic plan by which Georgetown strives to enhance its quality of life. The Operating Plan is an outline of the programs and services to be provided by the City during the coming year. The Operating Plan continues the direction established by our citizens and the City Council to meet the existing challenges and effectively plan for future needs. It is also an opportunity to ensure energies and resources are directed to the programs, policies and issues that are shaped by the Georgetown Century Plan and prioritized by the City Council. Community Growth – 2006/07 in Review The previous year has been filled with challenges and great opportunities, as the City’s tax base grew to over $3.6 billion, thus creating new and expanded opportunities. Yet, the greatest challenge continues to be providing affordable services to a rapidly growing community whose population now exceeds 44,000. The citizens of Georgetown have come to expect higher than average services, therefore the 2007/08 budget continues efforts to maintain that quality of life while retaining the historic “small town charm” that makes Georgetown unique. Funding those services continue to challenge City leaders. New and expanded revenue sources have been developed over the past several years to help offset potential tax increases. One such revenue source has been the expansion of the City’s Electric Utility into the City of Round Rock with service to the Round Rock Outlet Mall and Scott and White Hospital. Other areas include the sell of water services to municipal utility districts outside our ETJ (extra territorial jurisdiction). In both cases, the City generates revenues without the requirements of providing any public services. Commercial growth continues to occur at a rapid pace, thanks in part to the efforts of City staff. In fact, the City was awarded the 2007 Community Economic Development Award from the Texas Economic Development Council for its work in bringing a 300,000 square foot computer data center to Georgetown, as well as, the development of a biotech center that is the State of Texas’ recommended blueprint for public/private partnership. The Citicorp data center will bring as much as $450 million in new property value, and provide another major customer for the City’s Electric Utility. The Texas Life Sciences Commercialization Center will be home to several biotech firms, including Orthopeutics and Radix BioSolutions. Build out of both Wolf Ranch and Rivery retail centers have also occurred. A new 10-screen movie theater opened in the Rivery, as did several new restaurants, including IHOP. A new hotel convention center is also planned for 2009. While at Wolf Ranch, a new Taco Cabana and Kay’s Jewelry opened, with additional retail space being built in the coming year. ii The historic downtown area continues to provide a focal point for the community, as new and expanded business make the “Square” their home. The owners of Vista solutions, a software design company, renovated one of the buildings on the square, headquartering their offices on the top floor and opening a sports bar/restaurant on the bottom floor. Romeo’s, an Italian restaurant headquartered in Austin, opened a new location in the recently remodeled old Masonic building directly across from the Williamson County Courthouse which has reopened after a three year, $9 million renovation project, funded by Williamson County that restored the building’s historic structure. The City has also spent over $2 million for improvements to Main Street, including streetscape and sidewalks, all the while maintaining the historic and unique feel that is Georgetown. The increase in new retail business continues to be driven by the on-going residential growth within the community. While building permits were less than the previous year, they have remained steady throughout 2006/07 and are more in line with earlier years. Development also continues at Sun City, with residential homes now topping 5,000. The guidebook “Retirement Places Rated”, ranked Georgetown as the top place in the country to retire, sighting the City’s strong economy and affordable housing, saying “Georgetown offers the neighborliness of a small town with the cultural, entertainment and health-care amenities of a big city”. These are the same factors that also appeal to young families. Several large, non-age restricted, projects are also in the development process, including Water Oaks, a 2,600 acre development west of IH35 and Somerset, a 3,000 acre master planned development north of Sun City. Numerous other residential projects are being built throughout Georgetown. Work also began in developing a new comprehensive plan to address the growth issues facing the community. This year-long project required citizens throughout the community to come together and agree on what made Georgetown unique and provides a foundation for policies, strategies and actions needed to ensure the Georgetown of 2030 is as special as it is today. The new plan, tentatively called the Georgetown 2030 Plan, outlines this future vision and identifies the challenges the community will face. The Plan will replace the Georgetown Century Plan, originally adopted in 1986, and is expected to be adopted in early 2008. While managing growth will continue to challenge City leaders, the commitment to provide residents with that “something special” that makes for a truly unique hometown feeling will last into the upcoming year. Needless to say, it’s an exciting time to be in Georgetown. The Budget Process The City’s budget process begins each year with the Capital Improvements Program (CIP) planning process. CIP budgets are prepared on five and ten year planning horizons, based upon population and development projections. Revenue estimates for utility operations, as well as development impact fees, are prepared to forecast the ability of the rate base to fund needed capital maintenance, upgrades and expansions. Five year and ten year pro-forma models for each utility are prepared, as well as a ten year general fund and property tax model, which is prepared to determine the impact of general infrastructure and facilities improvements on future property tax rates. Each City department prepares a two-year operating budget. While only one year is formally adopted, the projection of the second year (2008/09 projected budget) is presented to identify the impact of current year programs and commitments on future budgets, and provides a “basis” for beginning the following year’s budget process. The City Council began its 2007/08 budget process in February 2007. With input from the City’s advisory boards and commissions, as well as, once again reviewing the results from the 2006 bi-annual Quality of Life survey, the City Council determined the 2007/08 budget priorities. This year’s priorities are centered on managing growth, preserving the City’s quality of life, and enhancing economic development within the community. Staff then developed programs for each of the priorities and estimated costs for implementation of each new program. The City Manager and management team then used the City’s fiscal and budgetary policy (included in the reference section) to prepare a budget proposal that balanced the cost of providing new programs with an acceptable revenue scenario. Many of the priorities from 2006/07 carried forward to the 2007/08 budget year as on-going priorities. The twelve 2007/08 Council priority goals, along with staff-developed strategies to address those goals are shown on the following page. A more in-depth description of the strategies is located in the budget highlights section of this letter. iii 2007/08 COUNCIL PRIORITY GOALS & STRATEGIES CITY DIVISION RESPONSIBILITY FOR IMPLEMENTATIONCommunity D ev C om muni t y S v c s F ina n c e & A dmin F ire GU S Mg t S v cs Police T ra n s p orta t io n 2007/08 COUNCIL PRIORITY GOALS & STRATEGIES A Continue revitalization and economic development *Continue implementation of Williams Drive Master Plan redevelopment ¥¥ ¥ *Adopt regulations to implement Transit Oriented Development ¥¥ *Create a Community Redevelopment staff position to oversee CBDG grants and other City redevelopment projects ¥¥ *Contract Public/Media relations consultant to target travel, tourism and entertainment contacts to promote Georgetown as travel destination ¥¥ *Implement a change of focus for 1/4 sales tax for street maintenance from rehabilitative to preventative maintenance ¥¥ B Alleviate traffic congestion *Develop plan to assume responsibility for signalization of traffic lights within City, with expected implementation before 2010 ¥ * py p g g g road projects ¥¥ ¥ *Develop and implement a Transit System Master Plan ¥¥ C Continue implementation of Downtown Master Plan *Construct gateway sign element for north end of downtown on Austin Avenue ¥ *Create master plan for infrastructure in downtown overlay district to determine improvements needed to serve existing and future development ¥ D Improve quality of services while keeping property taxes low *Implement APPA Customer Service Certification Program to improve services to our utility customers ¥ *Continue implementation of citywide records management program ¥ *Implement IVR phone system to process utility connects, disconnects, extensions and payments to improve customer response and efficiency ¥¥ * gg p p p y 2016 ¥ E Improve emergency response levels *Plan for opening of future fire station by hiring 6 additional firefighters ¥¥ *Implement the promotions necessary to operate a successful Squad Program ¥¥ *Evaluate options for possible replacement of the City's existing Computer Aided Dispatch system ¥¥ ¥ *Implement a proactive "IMPACT" team in Police to provide hands-on and positive influence within the Community ¥¥ *Implement a Digital Video Management System ¥¥ *Expand the City's Warrant Collection Program to improve warrant process and increase security for Municipal Court ¥¥ F Expand and coordinate Parks system *Upgrade fencing for baseball field in San Gabriel Park ¥ *Develop a skate park in San Gabriel Park ¥¥ *Develop funding plan for future Garey Park *Purchase river springs property for preservation and conservation ¥¥ *Make major repairs to River Ridge Pool ¥ G Continue efforts for community Long-Range Planning *Complete update of City's comprehensive plan ¥¥ * yy g y g y changes in 2010 ¥ *Continue implementation of voluntary and involuntary annexation plan ¥¥ ¥ ¥ ¥ ¥ ¥ *Create regulations to implement the conservation subdivisions, Transit Oriented Development, Mixed Use and Williams Drive Gateway land use categories ¥¥ *Implement Phase II of Graphic Information System (GIS) Plan ¥ *Plan ¥¥ ¥ *where feasible ¥¥ H Develop an Affordable Housing Program *Develop the Housing Element of the Comprehensive Plan ¥¥ *Seek state and federal grant funding for affordable housing programs ¥¥ ¥ I Expand recycling opportunities and environmental programs *Increase customer education through aggressive advertisements promoting the City's recycling and composting programs ¥ *Actively pursue grant participation to fund projects such as source reduction, recycling and public education ¥ * g compost ¥ *Develop a commercial recycling program ¥ *Encourage recycling at all City facilities ¥ J Ensure adequate staffing and competitive compensation for all employees * ee o p o g o gud g p a ouy p e e a ec o p es ao o employees that matches 100% City of Round Rock compensation for like positions ¥¥ K Continue implementation of City's Facility Plan *Rehabilitate the old historic Fire Station for alternative uses ¥¥ *Rehabilitate the old Library building ¥ *Coordinate the constuction of the Recreation Center Expansion ¥¥ *Complete the new Georgetown Communications and Technology building ¥¥ ¥ *Develop plan to address parking issues in the Southwest Quadrant of downtown ¥¥ *Begin design of Fire Station 5 in Sun City ¥¥ ¥ *Continue installation of defibrillators and 911 Call boxes in all City buildings ¥¥ L Increase operational efficiency and financial integrity *Implement Inventory Bar Coding system to improve warehouse management and prevent potential materials loss ¥ *Prepare a citywide information technology disaster recovery plan ¥¥¥¥¥¥¥¥ *Develop and implement service agreement with other local water utilities to read and bill water meters of mutual customers ¥¥ *Implement a Community Development process automation system ¥¥ ¥ *Install and integrate a fiber system for monitoring cameras at City operated traffic signals throughout the City ¥¥ *Evaluate services of Contract Specialist to review all City contracts to ensure proper documentation, as well as, conformity to City standards ¥¥ *Upgrade or replace the City's automated meter reading (AMR) system ¥¥ *implement solution ¥ iv BUDGET OVERVIEW The 2007/08 Annual Operating Plan (Budget) is an operational and financial plan for the programs and services provided by the City during the coming year. The proposed $185.2 million budget includes funding for all services, including utilities, as well as capital improvements for the upcoming year. Of that amount, approximately $117 million is for continued operations, which includes $40.7 million for purchased power costs, as well as, $15 million for debt payments and $43.2 million for capital improvement projects. Operating interfund charges/transfers, which include internal service fund transfers, are approximately $10.1 million. The 2007/08 Operating Plan is approximately 9.9% greater than the 2006/07 amended budget. Overall, on-going operating costs increased as a result of new programs to address Council priorities, increased purchased power costs and other fixed operational expenses. x Community Development – 4% increase due to the addition of an additional building inspector to provide added support to the Inspection department. Phase 2 of the Graphic Information System (GIS) is also funded, which includes the addition of a new GIS technician to expand program services. One-time funding includes the purchase of new software to automate the planning workflow process. These increases are offset by one-time programs included in the 2006/07 budget. x Community Services – 19% increase related to the addition of a Visitor Center Coordinator in the Convention and Visitor’s Bureau, as well as, 2 additional positions in the Parks Department to provided maintenance to the growing number of City parks and trails. Park improvements include continued funding of playground equipment replacement, as well as, new fencing at the adult baseball field in San Gabriel Park. A City skate park is also planned for 2008. x Finance and Administration – 17% decrease due to the transfer of debt funded Facility improvements and Fleet purchases from the operating departmental budgets to the General Capital Project (GCP) funds. 3 new positions are added in the division, including 2 new Building Maintenance technicians to help manage the growing number of City facilities. Funds to implement a new bar-coding system in the City warehouses is included, along with funding to implement a new telephone access system to provide customer access to customers during non-business hours. x Fire Services – 15% increase due to increased staffing and compensation for public safety needs. Six additional firefighters, and related promotions will implement the new “squad” concept for service delivery are included in this budget. With these added positions, the City begins the increase in staffing necessary for the January 2010 opening of Fire Station 5 in Sun City. A Battalion Chief position to manage the department’s training needs, as well as, an additional administrative support position is also funded. x Georgetown Utility Systems (GUS) – 5.8% decrease due to the transfer of both the Streets and Stormwater Drainage functions to the newly created “Transportation Services Division”. Contracted expenses for water/wastewater treatment increased in relation to customer growth. GUS will add 2 Journey Line Technicians to maintain service levels in Electric operations. An administrative support position was added at mid-year 2007, replacing the unfilled Key Account Specialist position. Key 2007/08 programs for GUS include upgrading the City’s Automated Meter Reading (AMR) System and expanding the water conservation program. Systems Engineering will also develop an infrastructure needs assessment for the Downtown Square area. Purchased power costs increased 29% due to rising energy v costs, as well as, increased customer growth, including new services to Citicorp data center and Scott and White Hospital. x Management Services – 11% increase due to the addition of several new positions. A Community Project Redevelopment position to assist in implementing economic and redevelopment projects, as well as, a Human Resource Generalist to address workload issues are both included in the budget. A part-time Video Producer is also added to assist in taping City Council meetings. This position is partially funded by the Georgetown Independent School District (GISD) and fees collected for public service announcements. Also included is the upgrade to full-time for a Technical Support Specialist in the Information Technology department. x Police Services – 18% increase due to increased staffing and compensation for public safety needs. Four positions are added to complete the remainder of the 3 year staffing plan adopted in 2004/05. In addition, 5 new officers are added to develop an “Impact Team” to proactively address neighborhood issues. An additional Warrant Officer is also included to expand the City’s warrant collection program and provide added security in Municipal Court. A School Resource Officer is also included, partially funded by GISD. A new Communications Manager and additional Communications Operator are added to fully implement the new dispatch center at the new Georgetown Communications and Technology (GCAT) building. A Records Specialist is included to assist in implementing the City’s new false alarm program. A part-time Animal Services Clerk is also added to improve customer service at the Animal Shelter. x Transportation Services – This division was created in the 2007/08 budget to provide additional oversight to the ever growing transportation needs of the City. This division will include the Street and Stormwater Drainage functions previously under GUS, as well as an Administration department that will include key staff dedicated to transportation, including the addition of the Director of Transportation Services. Key programs for 2007/08 include the establishment of a traffic department to address the City’s role in maintaining traffic signals, as well as developing regional pavement design criteria for street maintenance. x Capital Improvements – 4% decrease results from the prior year award of the $10.5 million contract to construct the new Recreation Center expansion, which is being built during 2008, with opening planned for January 2009. Major projects for 2008 are for utility infrastructure projects associated with the 2005 and 2006 annexations, as well as, improvements for the San Gabriel/Smith Branch wastewater interconnect. General Capital projects include equipment needed for the Recreation Center, as well as, funding to begin design for renovations to the old library building, as well as, design for Fire Station 5. x Debt Payments – increase primarily due to the issuance of General Obligation (GO) bonds in May 2007 for the Recreation Center Expansion. Utility debt service increases are related to the May 2007 revenue issue for electric substation construction and other electric system improvements. The 2007 GO bonds completed the November 2004 voter approvals for new City facilities, including the Library and Recreation Center Expansion. x Interfund Charges – these amounts vary from year to year due to project funding and source of funds. Property Taxes. The City Council adopted a property tax rate of $0.35629 per $100 valuation, which is a 4.2% increase over the effective tax rate. The effective property tax rate (the rate needed to collect the same amount of revenue as last year based upon the current year valuations) is $0.34217 which is 7% less than last year’s adopted rate of $0.36728. The rollback rate, or the highest rate allowable without risking a rollback election is $0.37527. This year’s rate includes $0.032 of sales tax used to reduce property taxes that offsets $0.0467 in total debt service associated with the November 2004 bond authorization for new facilities. Georgetown continues to have the lowest municipal tax rate in the Central Texas area. vi Property Values. The assessed property valuation for 2007/08 is $3.6 billion, which is a 14.8% overall increase over last year’s adjusted value of $3.1 billion. Of this increase, $336 million is new and annexed property. Existing property values increased 3.2% over last year. The average home value for 2007/08 increased from $167,557 2006/07 to $183,970 for 2007/08, a 9.7% increase over prior year. Utility Rates. While the current utility rates continue to support on-going operations in 2007/08, utility rates and fees will be reviewed throughout the upcoming year by City staff to ensure adequate funding is available to meet the on-going operational and capital requirements, and to address unique issues confronting the various utilities. Current water and wastewater rates are sufficient to fund the costs of operating the system. The implementation of the flat rate sewer program is estimated to forestall any additional rate adjustment in wastewater for 2 to 3 years. Water rates will be evaluated during early 2008 to possibly adjust the per 1,000 gallon price blocks as part of the City’s expanded water conservation program. Electric rates will be reviewed during the first quarter of the fiscal year, and adjustments among the various service components, including cost of fuel will be recommended to the City Council for implementation in January 2008. New sanitation rates were implemented in September 2007 to reflect the cost of providing services under the City’s new sanitation contract, as well as, City costs associated with contract oversight and management of the city’s various conservation programs. Stormwater rates will remain the same in 2007/08. Sales Taxes. The City’s total sales tax revenue increased over 10% in 2006/07. Much of this growth can be attributed to the continued build out of Wolf Ranch, an 800,000 square foot retail center developed by Simon Properties that opened in July 2005. Yet growth in base line sales tax (without Wolf Ranch) has averaged over 10% annually for the past two years, which indicates growth in other areas of the local economy. While sales at Wolf Ranch have been less than originally projected, they increased over 15% in 2006/07, primarily due to improved accessibility. A slight increase in sales tax at Wolf Ranch is expected in 2007/08 now that the IH35 Frontage Road is completed and further build out occurs. Wolf Ranch is currently home to Target, Old Navy and Kohl’s and numerous smaller retailers. The City rebates 53% of the 1% general sales tax generated at Wolf Ranch to the developer. The 2007/08 budget includes a 5% overall increase in sales tax revenue due to the volatility of the housing market and local economic conditions. Much of the non-Wolf Ranch revenue is attributed to building materials. With housing starts slowing, it is prudent to assume a slow down in this area. Historically, sales tax fluctuations mirror economic conditions. Sales tax now funds 24% of the General Fund operating budget, yet sales tax revenue is the most volatile revenue stream within the General Fund. Therefore, the City monitors this revenue stream closely for any potential shortfalls that could impact the General Fund cash flow. The City budgets a contingency reserve of 90 days of general fund operations, to provide stability should sales tax revenues fall short and has adopted a budget contingency plan as part of its Fiscal and Budgetary Policy. vii Additional Sales and Use Taxes In May 2001, voters authorized the adoption of an additional sales and use tax within the City at the rate of one-half of one percent, with the proceeds to be used for transportation system improvements to support economic development. This tax became effective October 1, 2001. The additional revenue is not part of the City’s general operating budget, but is budgeted and spent by a non-profit economic development corporation, Georgetown Transportation Enhancement Corporation (GTEC). GTEC was established expressly for the above purpose by the City Council. GTEC’s activities are included in the City’s audited financial statements as a blended component unit. A copy of GTEC’s approved 2007/08 budget is included within the reference section of this document In November 2002, voters authorized the adoption of an additional sales and use tax within the City at the rate of one quarter of one percent, with the proceeds thereof to be used for maintenance of streets in existence at the time of the adoption of the tax. This revenue is included in the City’s operating budget in a Special Revenue Fund. This tax has a four year sunset provision, and was reauthorized by the voters in November 2006. Currently, this tax will sunset in 2011 unless renewed. In May 2005, voters authorized the adoption of an additional sales and use tax within the City at the rate of one eighth of one percent, with the proceeds to be used to promote and develop new and expanded business enterprise on behalf of the City of Georgetown and became effective October 1, 2005. This additional revenue is not part of the City’s operating budget, and is budgeted and spent by a non-profit economic development corporation, Georgetown Economic Development Corporation (GEDCO). This corporation was established by the City Council to oversee this revenue. Activities are included in the City’s audited financial statements as a discretely presented component unit. A copy of GEDCO’s approved 2007/08 budget is also included within the reference section of this document In May 2005, voters also authorized the adoption of an additional sales and use tax within the City at the rate of one eighth of one percent, with the proceeds to be used for property tax relief. This tax became effective October 1, 2005 and is used in the City’s 2007/08 property tax calculation. Revenue from this sales tax is included in the City’s general operating budget. BUDGET HIGHLIGHTS The major program initiatives, linked to the Council’s priorities (paraphrased in bold italics) for the 2007/08 Annual Operating Plan are outlined as follows: x Community Development The division will continue efforts for community long-range planning by coordinating the completion of the City’s comprehensive plan update begun last year. Development of new ordinances, such as conservation subdivision and transit oriented development will ensure quality growth and preservation of natural areas. The division will also work on continuing the City’s voluntary and involuntary annexation plan. Funding to implement Phase 2 - “Moving Toward Enterprise GIS” is also included providing both internal and external customers improved online mapping capabilities. Another focus for the division will be to continue to develop an Affordable Housing Program with the creation of the Housing Element to be adopted in conjunction with the new comprehensive plan. $50,000 is included to increase operational efficiency and financial integrity with the implementation of an electronic case management system for Planning that integrates with Building Inspections, and makes project tracking available through the City’s website. x Community Services This division will continue to expand and coordinate the parks system by developing a funding plan for Garey Park, a 500 acre river-fronting parcel west of the City that is being donated to the City. $160,500 is funded for the renovation of River Ridge Pool, as well as, an additional $60,000 to upgrade the fencing at the adult baseball field in San Gabriel Park. $50,000 has been included to purchase the old batting cages in San Gabriel Park and convert them to a City skate park. Efforts will continue to purchase natural springs along the viii North San Gabriel River for preservation for future generations with $300,000 of funds remaining from 2006/07. The Convention and Visitor’s Bureau will continue revitalization and economic development by contracting with a media relations professional to increase public awareness of Georgetown as a quality tourist destination. The division will add three additional staff members, including a new Visitor’s Center Coordinator. x Finance and Administration The division will continue implementation of the City’s Facility Plan by beginning to plan for rehabilitation of the old historic fire station into alternative uses, as well as, beginning the design for Fire Station 5 in Sun City, scheduled to open in 2010. The old library building will also begin a renovation process for future uses, including possibly Municipal Court. The division will also oversee and coordinate the construction of the $12 million Recreation Center Expansion. $91,322 is included to add two additional Facilities Maintenance Specialists help in maintaining the growing number of City buildings. The Utility Office will implement an Interactive Voice Response (IVR) system to process utility connects, disconnects and payments to increase operational efficiency and financial integrity. Development of a service agreement with other local water providers to read and bill water meters of mutual customers will also increase efficiency. $50,000 is included in the Purchasing department to implement a bar coding system in the City warehouse to increase efficiency and prevent loss of materials. Funds are also included to contract services to review all City contracts to ensure proper documentation and conformity to City standards. The division will also assist the Transportation Advisory Board in developing funding strategies for future road projects to alleviate traffic congestion. x Fire Services Improving emergency response levels will continue to be the focus for Fire during 2007/08. $213,113 is included to fund four new firefighters to be added in January 2008, with an additional two firefighters added in July 2008. These additions will begin preparation for the future opening of Fire Station 5. Also funded are the promotions necessary to implement the “Squad” concept for improved service delivery. In June 2008, the division will add additional administrative support and a Battalion Chief will be hired in October 2008 to oversee and manage the departments training needs. x Georgetown Utility Systems (GUS) The division will continue efforts for community long-range planning by continuing to work towards implementation of the regional wastewater master plan for the San Gabriel Basin, and $25,000 is funded to work toward expanding the Water Certificates of Convenience and Necessity (CCN) to coincide with other City Services. Systems Engineering will inventory the City’s stormwater drainage system and prepare for regulatory changes in 2010 and has $25,000 for the creation of a utility infrastructure master plan in the downtown overlay district to determine the improvements needed to serve the existing and future developments thus continuing to implement the Downtown Master Plan. Sanitation will expand recycling opportunities and environmental programs through aggressive advertisements promoting the City’s recycling and composting programs, as well as, through the development of a commercial recycling program. The division will also install and integrate a fiber system for monitoring cameras at City operated traffic lights to increase operational efficiency and financial integrity. Other efficiency projects include the continued pursuit of ownership of all electric substations used within the City. $203,581 is included to add and equip two additional Journey Line Technicians to be hired in February 2008. $3 million is included in the Electric Capital Improvement Program to fund the update and replacement of the City’s Automated Meter Reading (AMR) System. Efforts to improve quality of services while keeping property taxes low is furthered by the investigation and renegotiation of a potential new provider for electric power contracts beyond 2016. x Management Services Management Services provides oversight to all divisions and also includes several stand alone departments that are not included elsewhere. Information Technology will prepare a citywide technology disaster recovery plan to increase operational efficiency and financial integrity. Human Resources will develop an on-going funding plan to implement market compensation for personnel and ensure competitive compensation for all employees. A Community Project Coordinator is added to oversee various community redevelopment projects and continue ix revitalization and economic development efforts. Continued implementation of the city-wide records management program will improve the quality of services while keeping property taxes low. This division will ensure the completion of all strategies outlined in the 2007/08 Operating Plan. x Police Services Police will strive to improve emergency response levels by adding a total of 14.5 positions in 2007/08, totaling $858,888. This includes the implementation of a 5 officer “impact team” to proactively provide a “hand- on” influence within the community, as well as, a warrant officer and school resource officer. Also included is additional staffing for the new Georgetown Communication and Technology (GCAT) building. In addition, four more officers are slated to begin in October 2007 to complete the 3 year plan to ensure adequate staffing. Over $200,000 is included for new law enforcement equipment, of which $90,000 is for evaluating a possible replacement for the City’s computer aided dispatch software. x Transportation Services This division has been created in 2007/08 to oversee and manage the City’s various transportation issues. A new Division Director is added for $132,720 to provide oversight to all division functions, including Streets and Stormwater Drainage. To alleviate immediate traffic congestion, the division will develop a plan to assume responsibility of traffic lights within the City, with expected implementation in 2010. $12,000 is included to fund a consultant to assist in this process. $15,000 will be used to develop regional pavement design criteria, as well as, to implement a program to move away from rehabilitative toward preventive maintenance for funding quarter cent street maintenance sales tax projects. The development of a Transit System Master Plan will also be a priority for the division. Capital Projects Capital improvements make up 23.6% of the City’s upcoming budget. The major projects, by type are listed below: General Capital Projects General capital projects are those that are funded through the general tax base, versus utility capital projects, funded through utility rates. The following projects are included as general capital projects for 2007/08: x Renovations to various City offices to accommodate employee and customer growth - $1 million x Construct City parking lots - $385,000 x Funding completions and equipment purchases needed for the new Recreation Center expansion - $816,000 x Design for renovation of the old library building - $300,000 x Various park improvements - $796,000 x Design of Fire Station 5 to be built in 2008/09 - $200,000 x Explore development of a parking garage downtown in conjunction with Williamson County - $250,000 Street Improvements and Maintenance The capital budget for street construction and maintenance is funded through two primary sources: General Fund revenue and the quarter cent sales tax for maintenance. The City’s General Fund will contribute $1.25 million for capital maintenance with represents approximately 4% of the General Fund operating budget. The City plans to increase funding to 5% in 2008/09 to fund additional maintenance needs for the City’s expanding street network. Over 65% of the City’s street maintenance program is funded by the quarter cent sales tax specifically for street maintenance initially approved by voters in November 2002, and reauthorized in November 2006 for 4 additional years. Without this funding source, budget adjustments would be required to continue to maintain City streets in an acceptable manner. x General, 1/4 cent sales tax and SIP funded projects: x 15th Street x San Gabriel Heights Subdivision x Sierra Vista Subdivision x Berry Creek Drive x MLK Drive Georgetown Transportation Enhancement Corporation (GTEC)projects are included in a separate budget that is adopted by the GTEC board and approved by City Council during the budget adoption process. Projects are administered and managed by City staff. A copy of GTEC’s approved budget is included in the reference section of this document. Utility Capital Projects The City will fund over $37.3 million for utility and infrastructure improvements in 2007/08. The majority of these projects are a part of the City’s on-going capital expansion and upgrades to ensure quality services to the citizens. Electric – Improvements are scheduled throughout the system. Water Services – Improvements include both water and wastewater projects required by annexation, as well as, construction of the Escalara elevated storage tank, various water line upgrades, the Smith Branch/San Gabriel interconnect, mandated Edward’s Aquifer Recharge Zone testing and repairs, the City’s cost for expansion of the Cimarron Hills Wastewater Treatment Plant and the second phase of the South Fork Interceptor. The Pecan Branch reuse and San Gabriel Park irrigation lines will also be completed. Stormwater – Construction of the Oak Tree Drive Bridge drainage improvements, as well as, remediation for San Gabriel River bank erosion, inventorying the City’s stormwater drainage system and improvements to the Maple Street culverts are planned for 2007/08. FINANCIAL HIGHLIGHTS The City is committed to sound financial planning and direction, and uses the City’s Fiscal and Budgetary Policy to guide the budget process and financial administration. This policy is reviewed and updated annually as part of the budget process and requires all funds be self-sustaining, meaning on-going operating revenues must fund on-going expenses. Also, the policy has substantial debt coverage requirements. All enterprise funds that have debt commitments are required to maintain 1.5 times coverage, meaning excess operating revenues must equal 1.5 times the annual debt service payment. The 2007/08 Annual Operating Plan meets the Council's goal that each utility system is a self-supporting operation that provides a desirable and affordable level of service. All of the City’s enterprise funds, including the Airport, are self-supporting and policy compliant in 2007/08. The City-wide contingency reserves have been increased 7.6% from $12.4 million to $13.35 million, due to the increase in the total operating budget. This amount represents 75 days city-wide operating expenses, with $5.85 million for General Fund, representing 90 days of operating expense in this fund. Capital improvements and purchased power costs are excluded from the contingency calculation. Revenues. The City's revenues continue to rise due to added property tax revenue resulting from an increased total assessed valuation, increases in sales tax revenues and increased utility service demands. The City's overall customer base for its electric, sanitation, wastewater and water services has increased at a rate of 5-7% for the last three years. The City continues to conservatively project a 5% increase in revenues for utility growth. Since weather conditions affect the electric and water revenues significantly, revenue projections utilize conservative growth estimates to avoid budget shortfalls, and utilize a rolling average consumption method to factor out any weather aberrations. xi General Fund. General Fund revenues are expected to increase for 2007/08, through increased property taxes and increases in sales taxes due to new retail development and growth in the City’s customer base. Return on investment transfers are expected to increase due to overall customer growth and higher revenues in the City’s utility system. Fee adjustments at the Community Center and for the new false alarm program will also contribute towards the increase. Court fines are expected to increase due to increased ticket volume. Other revenues are expected to remain stable through the upcoming year. Proposed Debt. The 2007/08 budget includes approximately $17 million in new debt issues. $11.9 million in revenue bonds are scheduled to be issued for utility infrastructure projects, including various electric system improvements, as well as, for the San Gabriel/Smith Branch wastewater interconnect. Debt will also be issued to renovate the old library building and the Oak Tree Drive Bridge along Berry Creek. Total tax supported debt is estimated at $4.2 million. The final amount of debt to be issued will be determined by project timing, as well as, any available excess funds from the 2006/07 fiscal year. The City plans to issue these bonds in April 2008. In November 2004, voters approved a $22 million bond package that included a new library, an expanded recreation center and renovation of the City’s community center. These bonds have been issued in stages to mirror cash flow needs and to minimize the impact on property tax rates. The City’s debt per capita increased this year due to the final issuance of the Recreation Center expansion bonds in May 2007. The City’s debt per capita continues to be lower than most comparable cities. The City‘s total tax-supported general debt is expected to be $53.6 million by September 30, 2008. Electric and Water Services Funds. Growth demands continue to impact service levels within the City’s two largest utility funds. Operational costs continue to increase as the infrastructure expands. Annexation within the City’s outlying area requires expansion of City services, and creates additional demands on the City’s existing utility facilities. The City's electric system continues to generate revenues sufficient for operations and maintenance and some system improvements. Growth within the southern most Electric service area continues to expand with the addition of a new $400M data center opening in early 2008. When fully operational, this project is expected to not only generate significant revenues to the Electric utility, by also provide over $700,000 annually as a Return on Investment (ROI) to the General Fund. In 2006, the City became the electric provider for several large developments within the City of Round Rock, including a new outlet mall, as well as, a regional hospital. The revenue generated in this area provides substantial income to the Electric utility, but also contributes an estimated $300,000 in ROI to the City’s General Fund, without increasing General Fund expenditures. This area is expected to further develop in 2008 with additional retail outlets. Growth, as well as, increased environmental mandates has also impacted the Water Services Fund, which includes the City’s water, wastewater and irrigation utilities. Water utility costs continue to increase due to increased operational costs, as well as increases in long term water supply cost and costs associated with the operation of the Williamson County Raw Water Line. Contracting for additional water with the Brazos River Authority has ensured the availability of a long-term water supply for Georgetown. Expenses in the wastewater utility have increased due to Edwards Aquifer compliance issues and increasing treatment plant operational costs. The expansion of effluent for irrigation purposes, which provides large commercial customers a non-potable water supply for irrigation needs, has been completed to help mitigate the demand on the City’s water plants for treated water. The City continues to pursue options for regional wastewater service on the City’s western boundary and is taking a leadership role in developing methods to promote sanitary sewer service and eliminate the proliferation of septic thus ensuring water quality for the Georgetown area. These actions will become critical as rapid growth continues within the area. xii Implementation will begin on capital improvements required by the City’s recent annexations. Over past two years, the City annexed over 10,000 acres to ensure land use control over critical growth areas along Georgetown’s gateways. These annexations will require over $7 million in water and sewer improvements over the next few years to provide service as required under the annexation plans. The first $3 million of these improvements are included in the 2007/08 Water Capital Improvement Program. The utility debt coverage ratio, a standard measure of utility revenue debt capacity, or the number of times the debt service payment could be funded through net income from the utility, remains healthy at an budgeted 3.15 times, and exceeds the City’s fiscal and budgetary requirement of 1.5 times coverage and the City’s utility bond requirements of 1.35 times coverage While the budgeted number is slightly more than previous years, the additional coverage is used in funding system maintenance and various mandated improvements throughout the various utilities. Sanitation Fund. The Sanitation Fund required a $70,000 internal loan from the General Fund in 2006/07 to eliminate a prior year deficit fund balance, caused primarily due to maintenance costs related to the closed landfill. A new sanitation contract and rate structure was implemented in September 2007, providing improved cost containment measures, as well as, improved management control for the City. As a result, the fund is expected to be self-supporting in 2007/08. The overall financial condition of this utility will be reviewed, and possibility changed from an enterprise fund to a special revenue fund in 2008/09. Airport Fund. The Airport Fund is financially self-supporting and funds its on-going operations, as well as provides a times coverage ratio of 1.55 times for its debt service coverage. Construction of the new airport traffic control tower was completed in July 2007, and will be operational in October 2007. Staffing costs are funded federally through the Texas Department of Transportation. The City is only required to fund building maintenance for the tower itself. The Airport Master Plan update will be completed in early 2008, and will include expected improvements to the Airport. Funding needs and a financial plan will be considered in the adoption of the updated Plan. Internal Service Funds. The internal service funds provide administrative services and asset management for information, facility, and fleet services to City programs and departments by charging lease and administrative fees. These fees are incorporated in each department’s budget. Information Services Fund $ 1,878,502 Add and replace network and application technology and hardware. Fees fund computer support services and annual software maintenance contracts. Facilities Maintenance Fund $ 1,482,277 Building maintenance and repairs to include HVAC, janitorial services and minor remodeling. Repairs and scheduled maintenance will be completed in 2007/08. Fleet Management Fund $ 1,700,113 Add / replace 31 vehicles and equipment. The Council continues the four-year replacement cycle for police vehicles and added digital cameras as standard equipment in patrol cars. CONCLUSION Georgetown is a growing community with ever increasing needs. The 2007/08 Annual Operating Plan allocates resources to address priorities identified by the City Council last spring and addresses many of those needs. This budget continues the prudent fiscal and budgetary policies implemented in previous years and provides services to the community through new and expanded programs. Each program addressed within the budget has been evaluated to ensure value to the community and enhancement to the quality of life for our citizens. xiii We believe we’ve made an outstanding effort to ensure the goals and objectives set forth by the Council have been met, as well as ensuring that Georgetown remains a safe and affordable place to live and work. The proposed budget balances the needs of the community with available funding to provide quality services to the citizens of Georgetown. This budget also continues the City Council’s commitment to preserving and enhancing Georgetown’s unique character and quality of life. Finally, we acknowledge the tremendous contributions and teamwork of all City staff in preparing the 2007/08 Annual Operating Plan. The management team worked together to assist in achieving the goals set by Council. Each department worked to find savings in their operating budgets, and to make suggestions for program improvements. Most notably, we want to recognize the Finance and Administration Division for their long and dedicated hours in preparing the Annual Operating Plan. Respectfully submitted, Paul E. Brandenburg Micki Rundell, CGFO City Manager Director of Finance & Administration