HomeMy WebLinkAboutAgenda CC 09.08.2020 WorkshopN otice of M eet ing of the Governing B ody of the C ity of Georgetown, Texas September 8 , 20 20 The G e orgetown City Council will meet on September 8, 2020 at 3:00 P M at Teleco nference The City o f Geo rgetown is committed to c ompliance with the Americans with Disabilities Act (AD A). If you re quire assistance in participating at a public meeting due to a disability, as defined under the AD A, re asonable assistance, adaptations, o r acco mmodations will be provide d upon request. P lease contac t the City Secretary's Office, at le ast three (3) days prior to the sche duled meeting date, at (512) 930-36 52 or City Hall at 808 M artin Luthe r King J r. Street, Georgetown, TX 78 62 6 for additional informatio n; TTY users route through Re lay Texas at 711. 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Policy De ve lopme nt/Re vie w Workshop - A P re sentatio n, discussion, and directio n regarding updating the City’s sign regulations -- J ack Daly, Co mmunity Services Direc to r, and Andreina Dávila-Quintero , Current P lanning Manager B P re sentatio n and discussion regarding the Transpo rtation Impact Fee study including basics of impact fees, land use assumptio ns, preliminary Capital Improvement P lan (C IP ), and stakeholder engagement plan -- Wesley Wright, P E, Systems Engineering Dire c to r C P re sentatio n and discussion regarding the mobility bond program targe ting the May 2021 ele c tion -- Bridget Hinze Weber, Assistant to the City M anager and Ray Miller, Director of P ublic Wo rks D P re sentatio n and discussion regarding the pro posed changes to the Fisc al and Budgetary P olicies as part o f the FY2021 budget deve lo pment process -- Leigh Wallace, Finance Director Exe cutive Se ssion In compliance with the Open Meetings Ac t, Chapter 5 51, Government Code, Verno n's Texas Codes, Annotated, the items listed below will be disc ussed in closed session and are subject to action in the regular se ssio n. E Sec. 5 51 .07 1: Consul tati on wi th Attorney Advice fro m attorney about pending or co ntemplated litigation and o ther matters on which the attorney has a duty to advise the City Co uncil, including agenda items - Litigation Update Page 2 of 223 Sec. 5 51 .07 2: Del i berati ons about Real P roperty - Riverhaven - We stingho use Right of Way Sec. 5 51 .07 4: P ersonnel M atters - Approval of appointment of Assistant City Attorney Sec. 5 51 .08 6: Certai n P ubl i c P ow e r Uti l i ti es: Competi ti ve M atters - P urchased P ower Update Sec. 5 51 .08 7: Del i berati ons R e gardi ng Economi c Devel opment - P roject Dazed Adjournme nt Ce rtificate of Posting I, R o b yn Dens mo re, C ity S ec retary fo r the C ity of G eorgetown, Texas , d o hereb y certify that this No tic e of Meeting was posted at C ity Hall, 808 Martin Luther King Jr. S treet, G eorgeto wn, T X 78626, a p lace readily ac ces sible to the general pub lic as required by law, on the _____ day of _________________, 2020, at __________, and remained s o posted for at leas t 72 c ontinuous ho urs p receding the s ched uled time o f said meeting. __________________________________ R o byn Dens more, C ity S ecretary Page 3 of 223 City of Georgetown, Texas City Council Workshop September 8, 2020 S UBJEC T: P resentation, disc ussio n, and direction regarding updating the City’s sign regulations -- J ack Daly, Community Services Director, and Andre ina Dávila-Quintero, Current P lanning M anager I T E M S UMMARY: Staff will be prese nting a pro posed approach to updating the City's sign regulations to ensure compliance with content- based standards as c larified by Reed v. Town of Gilbert, 57 6 U.S. 155 (2015). F I NANC I AL IMPAC T: None at this time. S UBMI T T ED BY: J ack Daly AT TAC HMENT S : Description P resentatio n DR AF T R edline C hanges to UDC C hapts 5, 10, 16 and O rdinanc e 12.12 and 12.16 Page 4 of 223 UPDATING SIGN REGULATIONS September 8, 2020 Page 5 of 223 Overview •Purpose (Reed vs. Town of Gilbert) •Current Issues •Proposed Approach •Recommendation on next steps •Timeline Seeking City Council concurrence on approach, recommendations, and timeline. Page 6 of 223 Review Team •Jeff Cardwell, Chief Plans Examiner •Jack Daly, Community Services Director •Brad Hofmann, Chief Code Enforcement Officer •Andreina Dávila-Quintero, Current Planning Manager •Jim Kachelmeyer, Assistant City Attorney Page 7 of 223 Reed v. Town of Gilbert (2015) •Content-based sign ordinances are an unconstitutional regulation of speech •For example: Cannot have different size, height and duration requirements for political signs than for signs providing directions to an assembly or other event •Recommendations •Eliminate any separate rules for categories of signs that are defined by the content or subject matter of their message. This means avoiding rules that have different size, height, or duration requirements for “political” signs, “directional” signs, “real estate” signs, etc. •Closely review “exceptions” to regulations to make sure they are not content based. Eliminate such exceptions even if they seem innocuous (e.g., exceptions for historical markers, address signs, etc.). •Adopt content neutral, “time, place, and manner” (TPM) regulations, including rules governing the size and location of signs, the amount of time signs are displayed, and the total number of signs allowed per mile of roadway. Page 8 of 223 Georgetown Sign Regulations •UDC •Chapt 5 –Zoning Use Regulations •Sec. 5.04.020 •Chapt. 10 –Signs Standards •Chapt. 16 -Definitions •Code of Ordinances •Sec. 12.12 –Advertising Sign and Banners •Sec 12.16 –Signs Adjacent to Freeways Page 9 of 223 Content-based Reed Issues in Georgetown’s Code •References to: •Civic uses and Non-Civic Uses •For example “Governmental flags” •Exemptions for •Real Estate signs •Political signs •HOA signs •Content-specific rules •Signs in ROW •Temporary signs •Home -builder signs Page 10 of 223 Proposed Approach •Phased approach •Address Reed issues •Consolidate sign regulations as much as possible •Preserve home-builder sign program •Disallow temporary signs in ROW, including for special events •Specific signage requirements based on zoning are allowed (e.g. automobile signs) •Gets tricky with SUPs that are issued based on specific use within a zoning district •Clarify prohibitions, enforcement Page 11 of 223 Recommendation –Georgetown Two-Step •First •Fix constitutional issues in current sign regulations •Administrative/Legal clean-ups to make current practices and interpretations more clear •Consolidate ordinance •For example –all prohibited signage should be in same section, remove duplicative language •Executive amendment process •Will keep UDC Advisory Committee advised •Second •Address items previously approved in UDC general amendment list •Public process to discuss further additions and amendments •Utilize UDC Advisory Committee Page 12 of 223 Recommendations •PROS •Addresses Reed concerns •Creates incentive to finish amending sign ordinance •Removes conflicts and ambiguity within the Chapter and other sections of the UDC •Simplifies second round redline for UDC Advisory Board and Public •FYI •No signs allowed in right-of-way •Removes prohibition on off-premise signage •CONS •Removes and limits some civic use signs •Executive amendment process •Public hearing will still be required at the Planning and Zoning Commission and City Council meetings Page 13 of 223 Potential Topics for Round Two Changes •General amendments recommended by UDC Advisory Committee •Portable Sign Definition •Feather Signs •H-frame signs •Signs affixed to vehicles •“Mobile” billboards •Temporary Signs vs. Banners •Digital Signs •Fuel Price Signs •Downtown and Old Town Design Guidelines •To be completed through the Guidelines review process Page 14 of 223 Proposed Timeline •Sept 8–City Council Workshop to discuss proposed changes and approach •Subsequently –P&Z and then Council for first reading of first round ordinance (tentative) •P&Z –Recommendation –Oct. 6 •Council –1st Reading –Oct. 27 •Council –2nd Reading –Nov. 8 •Fall/Winter–Public process for second round ordinance changes •Winter/Spring–First reading of second round ordinance changes Page 15 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 1 of 40 Chapter 10  Deleted language is strikethrough   Chapter 10 ‐ SIGN STANDARDS     SECTION 10.01. ‐ GENERAL     Sec. 10.01.010. ‐ Authority.     The provisions of this chapter are adopted pursuant to Texas Local Government Code ch.chs. 51,  54, 211, 216 and the City Charter.     Sec. 10.01.020. ‐ Purpose and Objectives.     The purpose of this chapter is to provide clear regulations for the permitting, design, location,  construction, modification, use, maintenance, and removal of signs in the City and its  extraterritorial jurisdiction. The objectives are: to encourage the effective use of signs as a means  of communication in the City; to maintain and enhance the communityʹs overall aesthetic  environment and the Cityʹs ability to attract sources of economic development and growth; to  improve pedestrian and traffic safety; to minimize the possible adverse effect of signs on nearby  public and private property; and to enable the fair and consistent enforcement of these sign  regulations.    Sec. 10.01.030. ‐ Applicability and Effect.     A.  A sign may be erected, placed, established, painted, created, or maintained in the jurisdiction  only in conformance with the standards, procedures, exemptions, and other requirements of  this Code. These regulations apply to both commercial and non‐commercial messages.     B.  The effect of this section is to prohibit all All signs not expressly permitted by this  sectionChapter are prohibited, except as approved through the appeals process established  by this Code. In particular, the following signs are expressly prohibited within the city limits  and the extraterritorial jurisdiction of the City:    1. Signs, temporary or otherwise, within public rights‐of‐way;    2. Signs, temporary or otherwise, affixed to a tree or utility pole; and    3.  Signs, temporary or otherwise, located within the restricted area defined in Section  12.44.010 of the Code of Ordinances (ʺsight triangleʺ).     Sec. 10.01.040. ‐ Jurisdiction. and Applicable Regulations in Extraterritorial Jurisdiction.     A. In accordance with Texas Local Government Code §§ 216.901 and 216.902, these regulations  apply to all areas within the corporate limits of the City and those areas within theits  Page 16 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 2 of 40 Chapter 10  Deleted language is strikethrough   extraterritorial jurisdiction and supersede the regulations adopted under Chapter 394 of the  Texas Transportation Code.     A.  Application in Extraterritorial Jurisdiction.     B. The following assignments establish areas of sign regulation in the extraterritorial  jurisdiction of Georgetown., for signs not prohibited by Section 10.01.030. In overlapping  areas, the most restrictive sign regulations will apply.     1.  Any area within 200 feet of a residential lane, residential street, or rural subdivision  street right‐of‐way must meet all sign regulations that apply within the RSResidential  Single‐Family (RS) Zoning District.     2.  Any area within 200 feet of a residential collector street right‐of‐way must meet all  sign regulations that apply within the MF Zoning DistrictHigh Density Multi‐Family  (MF‐2) and Low Density Multi‐Family (MF‐1) Zoning Districts.     3.  Any area within 200 feet of a major collector street right‐of‐way must meet all sign  regulations that apply within the Local Commercial (C‐1) Zoning District.     4.  Any area within 250 feet of an arterial (major or minor) or a freeway right‐of‐way  must meet all sign regulations that apply within the General Commercial (C‐3)  Zoning District.     5.  Any other area within the extraterritorial jurisdiction must meet all sign regulations  that apply within the Agriculture (AG) Zoning District.     Sec. 10.01.050. ‐ Master Sign Plan.     Pursuant to the procedures and provisions outlined in Section 3.12 (ʺMaster Sign Planʺ) a Master  Sign Plan shall be required for all multiple‐tenant buildings, Planned Unit Developments, and all  multi‐building or multi‐occupant commercial developments before any signs for such  development may be erected on the property. All owners, tenants, subtenants, and purchasers of  individual units within the development shall comply with the approved Master Sign Plan.     Sec. 10.01.060. –‐ Nonconforming Sign Standards.     The standards for nonconforming signs are set forth in Section 14.06 (ʺ, Nonconforming Signsʺ)..     Sec. 10.01.070. –‐ Variances.     Variances shall be processed pursuant to the provisions outlined in Section 3.15 (ʺ, Zoning  Varianceʺ). and Special Exception.  Page 17 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 3 of 40 Chapter 10  Deleted language is strikethrough     Sec. 10.01.080. –‐ Abandoned and Unsafe Signs.     On premise sign(s) shall be removed after the first anniversary of the date that the business,  person, or activity that the sign(s) identifies or advertises ceases to operate on the premises on  which the sign is located. If the premise on which the sign(s) is located is leased, then the City can  require the sign to be removed two years after the date that the most recent tenant ceases to  operate on the premises.   A. All signs in the city limits and ETJ shall be properly maintained at all times to the satisfaction  of the Building Official. Abandoned Signs, or signs that are illegal, unsafe, or insecure, are  hereby declared to be a public nuisance. Failure to maintain or remove a sign in violation of  this Section may be subject to penalties as set forth in Section 10.09.    B. Pursuant to Section 216.003(e) of the Texas Local Government Code, if the Building Official,  of his or her designee, determines a sign is an Abandoned Sign, the owner, agent, or person  having the beneficial use of the land, building, or structure upon which the sign is located  shall remove the Abandoned Sign within 30 days of said determination.     C. Pursuant to Chapter 54 of the Texas Local Government Code, if the Building Official, or his  or her designee, determines a sign is, unsafe, insecure, or presents a hazard to the public in  any way, he or she shall provide notice to the owner, agent, or person having the beneficial  use of the land, building, or structure upon which the sign is located. If within 15 days of the  day of the notice the sign is not repaired, made conforming, or removed, or an appeal has  not been filed in accordance with this Section, the Building Official is hereby authorized to  cause the removal of such sign, and any expense incident hereto shall be paid by the permit  applicant, owner of the land, building, or structure to which such sign is attached or upon  which it is erected. The Building Official may cause any sign, which is determined to be an  immediate hazard to the general public, to be removed summarily and without notice.     D. The owner, agent, or person having the beneficial use of the land, building, or structure upon  which the sign is located may appeal the determination of the Building Official, or his or her  designee, that a sign is unsafe, insecure, or presents a hazard to the public by filing an appeal  with the Building Standards Commission within 15 days of such notice, under the procedure  for appeal of a decision of the Building Official under Chapter 2.64 of the Code of  Ordinances. Upon receipt of an appeal, the Building Standards Commission shall schedule  a hearing for the next available meeting, where the Building Official and the appellant shall  each have an opportunity to speak to the status of the sign.  The Building Standards  Commission shall have the power to affirm or reverse the determination of the Building  Official, and the decision of the Building Standards Commission shall be final.     Sec. 10.01.090. ‐ Alternative Sign Plan.     Page 18 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 4 of 40 Chapter 10  Deleted language is strikethrough   To provide flexibility in the attainment of sign code compliance, an applicant may request an  Alternative Sign Plan when a Master Sign Plan is either not applicable or practical under the  circumstances. The Building Official is the decision‐making authority for an Alternative Sign Plan  using the Administrative Exception process detailed in Section 3.16, Administrative Exception,  of this Code.     SECTION 10.02. ‐ SUMMARY OF PERMITTED SIGNS     The following Table establishes permitted signs within the corporate limits of the City and those  areas within the extraterritorial jurisdiction based on underlying Zoning District. Table 10.06.010  details permitted signs with specific dimensional standards per zoning district, overlay district,  or street corridor. All sign types not listed in Table 10.02 or 10.06.010 are prohibited, unless  otherwise specified in this chapter.     Table 10.02: Permitted Sign Types by District    Sign Type   RS, RE  & RL &  MH  Districts  AG, TF,  TH &  MF‐1 &  MF‐2  Districts  OF  District  CN &  PF  Districts  C1, C3,  BP & IN  Districts  MU  District  Downtown  and Old  Town  Overlay  District  A = allowed without permit  P = sign permit required   C = Certificate of Design Compliance, sign permit required   Non‐Civic Uses   Banner  —  —  P  —  P   See Section  4.09.100  C   Changeable  copy  —  —  —  —  P  C   External   illumination  —  —  P  P  P  C   Incidental  A  A  A  A  A  A   Internal   illumination  —  —  P  —  P  C   Residential  A  A  A  A  A  A   Subdivision   entry  P  P  —  —  —  —   Temporary  P  P  P  P  P  C   Sandwich Board — — A A A A  Page 19 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 5 of 40 Chapter 10  Deleted language is strikethrough   A = allowed without Permit  P = Sign Permit required   C = Certificate of Appropriateness required; Sign Permit required   Civic Uses   Banner  —  —  P  P  P   C   Changeable  copy  P  P  P  P  P   C   External   illumination  P  P  P  P  P   C   Incidental  A  A  A  A  A   A   Internal   illumination  —  P  P  P  P   C   Temporary  P  P  P  P  P   C     SECTION 10.03. ‐ SIGNS EXEMPT FROM REGULATIONS     Sec. 10.03.010. ‐ Exempt Signs.     A.  The following signs shall be exempt from regulation under this Code:     1.  Any public notice or warning required by a valid and applicable federal, state, or local  law, regulation, or ordinance;     2.  Any sign inside a building, not attached to a window or door, that is not legible from a  distance of more than three feet beyond the lot line of the lot or parcel on which such  sign is located;     3.  Holiday lights and decorations with no commercial message, but only between October  16 and January 15Reserved;     4.  Decorative landscape lighting onlyReserved;     5.  Traffic control, service entrance, and directional signs on private property, such as  ʺStop,ʺ  ʺYield,ʺ “Enter,” and similar signs, the face of which meet Department of  Transportation standards and which contain no commercial message of any sort that do  not exceed four feet in height or four square feet in area or meet State or City standards  or conform to the Manual of Uniform Traffic Control Devices, as published by the U.S.  Department of Transportation, Federal Highway Administration;     6.  Address and postbox numerals conforming to incidental sign regulations;     Page 20 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 6 of 40 Chapter 10  Deleted language is strikethrough   7.  Government signs, including flags, erected by or for the city, county, state or federal  government in furtherance of their governmental responsibility;     8.  Legal notices;     9.  Memorial signs or tablets and building markers displayed on public or private buildings  and tablets or headstones in cemeteriesReserved; and     10.  Signs prepared by or for the local, state, or federal government marking sites or  buildings of historical significance that do not exceed 7 feet in height or 8 square feet in  area.     Sec. 10.03.020. – Provisionally Exempt SignsReserved.     The signs listed below may be erected without a sign permit provided that standards of this  section shall be met.     A.  A‐Frame Signs.     A‐frame signs no taller than four feet nor wider than three feet with a maximum area  per side of 12 square feet along sidewalks abutting the advertised businesses in retail  centers having at least 20,000 square feet of gross leasable area when the property  manager has approved the sign in writing. The owner of a business shall be responsible  for maintaining a copy of said written approval on the premises of the advertised  building.     B.  Construction Site.     These signs shall not exceed a total of 100 square feet or the total area permitted under  Section 10.06.010. Such signs shall be removed within one week following completion of  the work. ʺConstruction siteʺ sign is defined as a temporary sign that states the name of  the developer and contractor(s) working on the site and any related engineering,  architectural, or financial firms involved with the project.     C.  Directional.     The sign shall not exceed four feet in height and two square may be used to direct  vehicles or pedestrians. These signs are not to be used for the purposes of advertisement.    Page 21 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 7 of 40 Chapter 10  Deleted language is strikethrough        D.  Special Sale Signs.     1.   ʺFor Saleʺ signs placed on vehicles, provided that the area of the sign does not  exceed two square feet.     2.   ʺGarage Saleʺ signs that meet the following criteria:     a.  On‐Premise Signs. One sign shall be allowed to be placed on the property where  the garage sale is to be held.     b.  Off‐Premise Signs. With the permission of the property owner(s) where the  sign(s) are to be located, up to two off‐premise signs may be placed on private  property located not more than 1,000 feet from the property where the garage  sale will be held.     c.  Sign Size. Garage sale signs shall not exceed four square feet.     d.  Attachments to Signs. No attachments to signs are allowed, including but not  limited to balloons, ribbon streamers, or other attention getting accessories.     e.  Location of Signs.     i.  Signs shall be placed at least ten feet back from the curb or edge of street  pavement.     ii.  Signs or notices under this section shall not be fixed to or located upon any  public property, right‐of‐way or easement, utility pole, street sign, traffic  sign or pole, sidewalk or other public way.     iii.  Signs shall not be placed within a street median or within the restricted  area defined in Section 12.44.010 of the Code of Ordinances (ʺsight  triangleʺ).     f.  Posting and Removal of Signs. Signs shall not be posted more than 24 hours  prior to the beginning of the sale. All signs advertising a garage sale shall be  Page 22 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 8 of 40 Chapter 10  Deleted language is strikethrough   removed by the person having the sale no later than 24 hours following the sale.  The Cityʹs Code Enforcement Officers are authorized to remove any sign that  does not comply with any provisions of this chapter without notice.     E.  ʺNo Trespassingʺ or ʺPostedʺ.     These signs shall be allowed subject to the following standards:     1.  They shall not exceed one square foot in area.     2.  They shall be located on private property.     3.  There shall be not more than one per 100 feet of property line.     F.  Parking and Traffic.     These signs shall conform to the Manual of Uniform Traffic Control Devices, as  published by the U.S. Department of Transportation, Federal Highway Administration.  Signs shall not exceed four square feet in area and may be placed on private property to  direct and guide traffic and parking on same private property. Such signs shall not  include advertising visible from any location outside of the property on which the sign  appears.         G.  Political.     Temporary signs advertising political parties or candidates for election or signs that  otherwise provide for freedom of expression unrelated to any commercial endeavor may  be erected or displayed and maintained on private property provided that:     1.  The placement of signs shall have the consent of the property owner.     2.  No such signs shall be placed on or within public rights‐of‐way, on public property  or within visibility triangles.     H.  Real Estate.   Page 23 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 9 of 40 Chapter 10  Deleted language is strikethrough     One on‐premises real estate, indicating that a property or any portion thereof is available  for inspection, sale, lease or rent by a real broker or property owner sign is permitted in  compliance with the following standards:     1.  Sign is non‐illuminated.     2.  Sign is removed within 15 days after property closing or lease signing.     3.  Signs in a residential area do not exceed two square feet in area by five feet in height  with a two‐foot setback for each parcel, property, or structure.     4.  Signs in a commercial area do not exceed 32 square feet.     5.  One additional sign in conformance with other provisions of this section may be  allowed on a site abutting more than one roadway.     6.  Real Estate signs shall comply with the setback and height standards for the Zoning  District in which they are located, pursuant to Table 10.06.010.     I.  Service Entrance.     An incidental sign for building identification provided the sign area does not exceed  four square feet, and is non‐illuminated.     J.  Signs Along Streets, Public Ways or Railroads.     No sign or flag may be placed on or over the area located within ten feet of the back of  the street curb for City or County rights‐of‐way or the actual right‐of‐way, whichever is  greater or within 25 feet for State rights‐of‐way or the actual right‐of‐way, whichever is  greater or if no curb exists, the impervious surface of the street or if unpaved, the area  located within ten feet of the portion of the City ordinarily used for vehicular travel, the  median of a street, across the public right‐of‐way line extended across a railroad right‐ of‐way or in the restricted areas at street intersections designated by Section 12.44.010 of  the City of Georgetown Municipal Code, with the following exceptions:     1.  Permanent signs, including: Public signs erected by or on behalf of a governmental  body to post legal notices, identify public property, convey public information, and  direct or regulate pedestrian or vehicular traffic;     2.  Bus stop signs erected by a public transit company. No advertising is permitted at  bus stops except for a single sign no larger than two square feet that advertises the  bus stop;   Page 24 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 10 of 40 Chapter 10  Deleted language is strikethrough     3.  Informational signs of public utility regarding its poles, lines, pipes or facilities;     4.  Canopy, projecting, and suspended signs projecting over a public right‐of‐way in  conformity with the conditions of this Code;     5.  Emergency warning signs erected by a governmental agency, a public utility  company or a contractor doing authorized or permitted work within the public  right‐of‐way;     6.  Temporary event signage is restricted within public rights‐of‐way in Section  10.07.040.     K.  Window Signs/Advertising Posters.     A sign posted, painted, placed or affixed in or on a window exposed to public view not  exceeding 50 percent (50%) of the total window area is provisionally exempt. An excess  of the 50 percent (50%) will cause the entire area to be calculated as an element of total  allowable site signage.     L.  Other Incidental Signs.     Any other incidental signs secondary in purpose to the use of the lot on which it is  located and not exceeding four square feet in area in addition to those signs allowed by  Section 10.06.010. These signs are not to be used for the purposes of advertisement.     M.  Certain light pole mounted banners pursuant to Section 10.07.030.     N.  Homeowner/Neighborhood Association Signs.     Temporary signs associated with meetings, notices, or other information pertaining to a  registered homeownerʹs or neighborhood organization, which consists solely of the  homeowners of a subdivision or neighborhood, provided the following provisions are  met:     1.  Signs shall be placed only within the boundaries of the applicable subdivision or  neighborhood.     2.  Signs shall not be placed in any right‐of‐way.     3.  Signs shall not be posted more than 48 hours prior to the beginning of an event or  item requiring notice. All such signs shall be removed by the  homeowner/neighborhood association no later than 24 hours following the event.   Page 25 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 11 of 40 Chapter 10  Deleted language is strikethrough     4.  Signs shall not be placed in a manner that inhibits or interferes with vision or  otherwise affects public health, safety, and welfare.     5.  Homeowner/neighborhood association signs shall not exceed four square feet in  size.     6.  Signs shall not be placed within a street median or within the restricted area defined  in Section 12.44.010 of the Code of Ordinances (ʺsight triangleʺ).     SECTION 10.04. – TYPES OF SIGNS PROHIBITED UNDER THIS CODE     All signs not expressly permitted under this Code or exempt from regulation hereunder in  accordance with the previous section are prohibited within the corporate limits of the City and  those areas within the extraterritorial jurisdiction. Such signs include, but are not limited to:     A.  Beacons;     B.  Portable Signs;     C.  Roof signs above the lesser of the height of the structure or allowable freestanding sign  height within the District in which it is located;     D.  Strings of lights not permanently mounted to a rigid background, except those exempt  under the previous section Reserved;     E.  Inflatable signs and tethered balloons greater than 18 inches in diameter;     F.  Flashing, fluttering, undulating, swinging, rotating, or otherwise moving signs;     G.  Signs, temporary or otherwise, affixed to a tree or utility pole Reserved;     H.  Signs violating the ʺsight triangleʺ provisions Reserved;     I.  Off‐premise advertising signs, except as expressly permitted in this Code Billboard Signs;     J.  Streamers;     K.  Electronic message centers in fixed or traveling mode;     L.  Signs that emit an odor or produce an audible message; and     M.  Unshielded neon.   Page 26 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 12 of 40 Chapter 10  Deleted language is strikethrough     SECTION 10.05. – SIGN LIGHTING STANDARDS     A.  No illuminated sign which has a sign area of 150 square feet or less shall have luminance  greater than 300 foot candles, nor shall it have luminance greater than 300 foot candles for  any portion of the sign within a circle two feet in diameter.     B.  No illuminated sign which has a sign area greater than 150 square feet shall have a luminance  greater than 200 ‐foot candles for any portion of the sign within a circle of two feet in  diameter.     C.  No unshielded light source may be visible from the edge of the public right‐of‐way at a  height of three feet.     SECTION 10.06. ‐ SIGN DESIGN AND AREA REGULATIONS     Sec. 10.06.010. – Sign Dimensional Standards.     Table 10.06.010: Sign Dimensions by District    Zoning  District  Classification   Maximum  Area Per  Sign (sq. ft.)   Maximum  Height  (feet)   Minimum  Setback  (feet) *  Maximum  Number  per Lot   Conditions   Downtown   Overlay and Old  Town Overlay  districts (see also  base zoning  district  requirements  below)  For additional detailed guidelines related to signs in this Districtthese Districts, see  Chapter 9, ʺDesign Guidelines for Signsʺ, in the Cityʹs Downtown and Old Town  Design Guidelines for the Downtown Overlay District. .   Monument signs shall be no greater than 5 feet in height and pole signs willshall not be  permitted.   Williams Drive  SP Overlay   Freestanding  Monument  Sign   48  5  5  1  10.06.030A   MU See Section 4.09.100  Non‐Civic   Uses in:    AG   RE   RL   Freestanding  Monument  Sign   2  5  2  1  10.06.030A   Governmental  Flag  40  25  5  —  10.06.030E   Page 27 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 13 of 40 Chapter 10  Deleted language is strikethrough   RS   TF   MH  Building Wall   .5 per lin ft of  primary  facade   —  —  —  10.06.030C   Civic Uses in:   AG   RE   RL   RS   TF   Freestanding  Monument  Sign   32  5  10  1  10.06.030A   Low Profile  Pole Sign  20  5  10  1  10.06.030A   Governmental  Flag  40  25  5  —  10.06.030E   Building Wall   .5 per lin ft of  primary  facade   —  —  —  10.06.030C   All Uses in:   OF   CN   PF   TH   MF ‐1  MF‐2   (For properties  fronting Williams  Dr/FM 2338, IH‐ 35, SH‐195, SH  130, see below)  Freestanding  Monument  Sign   32  5  5   1 per 500ʹ of  frontage or  fraction  thereof   10.06.030A   Low Profile  Pole Sign  20  6  5   1 per 500ʹ of  frontage or  fraction  thereof   10.06.030A   Governmental  Flag  40  25  5  —  10.06.030E   Building Wall   1 per linear  foot of  primary   facade   —  —  —  10.06.030C   Incidental Sign 4 2 5  Two (2) per  acre per lot.  Additional  signs may be  approved  through a  Sign Master  Plan per  Section  10.01.050   —  All Uses in:   C‐1   C‐3   BP   Freestanding  Monument  Sign   1 per lin ft of  primary  facade not to  exceed a max  6  5 (10 in IN  District)   1 per 500ʹ of  frontage or  fraction  thereof   10.06.030A   10.06.030F   Page 28 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 14 of 40 Chapter 10  Deleted language is strikethrough   IN   MU‐DT   (for properties in  the MU‐DT  District, see also  Downtown  Overlayand Old  Town Design  Standards  Guidelines.   For properties  fronting Williams  Dr/FM 2338, IH‐ 35, SH‐195, SH  130, see below)   of 48 sq ft per  sign face   Low‐Profile  Pole Sign  20  10  5 (10 in IN  District)   1 per 500ʹ of  frontage or  fraction  thereof   10.06.030A   Governmental  Flag  40  25  5  —  10.06.030E   Building Wall   1 per linear  foot of  primary   facade   —  —  —  10.06.030C   10.06.030F   Incidental Sign 4 2 5 (10 in the  IN District)  Two (2) per  acre per lot.  Additional  signs may be  approved  through a  Sign Master  Plan per  Section  10.01.050     —  All properties  fronting Williams  Drive/FM 2338  (except for the SP  Overlay District,  below)   Freestanding  Monument  Sign   48  5  5  1  10.06.030A   10.06.030F   Governmental  Flag  40  25  5  —  10.06.030E   Building Wall   1 per linear  foot of  primary   facade   —  —  —  10.06.030C   10.06.030F   Incidental Sign 4 2 5  Two (2) per  acre per lot.  Additional  signs may be  approved  through a  Sign Master  Plan per  Section  10.01.050     —  Page 29 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 15 of 40 Chapter 10  Deleted language is strikethrough   All properties  fronting:   IH‐35   SH‐195   SH‐130   Freestanding  Monument  Sign   60  8  5   1 per 200ʹ  frontage or  fraction  thereof   10.06.030A   High Profile  Monument   Signs on  SH‐195 and  SH‐130   225  28  5   1 per 600ʹ of  frontage or  fraction  thereof   10.06.030F   High Profile  Monument   Signs on IH‐35   225  28  5   1 per 600ʹ of  frontage or  fraction  thereof, but  not less than  400ʹ  separation   10.06.030F   Pole Signs on  IH‐35  225  28  __   1 per 600ʹ of  frontage or  fraction  thereof, but  not less than  100ʹ  separation,  w/ 200ʹ from  Monument  Sign   10.06.030D   Governmental  Flag  40  25  5  —  10.06.030E   Building Wall   1 per linear  foot of  primary   facade   —  —  —  10.06.030C   Incidental Sign 4 2 5   Two (2) per  acre per lot.  Additional  signs may be  approved  through a  Sign Master  Plan per  Section  10.01.050     —  Page 30 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 16 of 40 Chapter 10  Deleted language is strikethrough   Multi‐tenant  Signs  Multi‐tenant Signs are allowed per the provisions of Section 10.06.050   Residential   Model Homes  Model Home Signs are allowed per the provisions of Section 5.08.020H020.H   Bed and   Breakfast  B&BBed and Breakfast Signs are allowed per the provisions of Section 5.04.020B020.B   Office in   the RS District   OfficesOffice uses in RS District with a SUP are allowed one sign per the provisions of  Section 5.04.020K020.K   Automobile   Sales, Rental   or Leasing   Facility   Automobile Sales, Rental or Leasing Facility Signsuses are allowed signs as per the  provisions   of Section 5.04.020S    * The setback requirements above apply to all parts of the sign, as well as all parts of its pole,  foundation, or other appurtenances. Please also refer to Section 10.06.030.H.1 for additional  setback requirements applicable to signs adjacent to public rights‐of‐way.    Sec. 10.06.020. ‐ Sign Area Computation.     The following describes the computation of sign area and sign height.     A.  Computation of Area of Individual Signs.     1.  The permitted area for all signs pursuant to Table 10.06.010, shall be inclusive of the  sign base and sign cabinet. The sign cabinet is the structure or border used to  differentiate a sign face from the structure against which a sign face is placed. In no  case shall the overall sign structure, including the base, exceed the maximum allowed  height nor the maximum allowed sign area.     2.  Where a sign consists of individual letters, words, or symbols attached to a surface,  building, canopy, awning, or wall and all such elements are located in the same plane,  the sign area shall be the area of the smallest rectangle which completely encompasses  all such letters, words, or symbols and any accompanying background of a color  different than the natural color of the wall. Where such sign includes multiple words,  each word located in the same plane shall be computed separately.     B.  Computation of Area of Multi‐Faced Signs.     The sign area for a sign with more than one face shall be computed by adding together the  area of all sign faces visible from any one point. When two identical sign faces are placed  back to back, so that both faces cannot be viewed from any point at the same time, and when  such sign faces are substantially similar, and when such sign faces are part of the same sign  structure the sign area shall be computed by the measurement of one of the faces.   Page 31 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 17 of 40 Chapter 10  Deleted language is strikethrough     C.  Computation of Height.     The height of a sign shall be computed as the mean distance from the base(s) of the sign at  normal grade to the top of the highest attached component of the sign. Normal grade shall  be construed to be the lower of (1) existing grade prior to construction, or (2) the newly  established grade after construction, exclusive of any filling, berming, mounding, or  excavating solely for the purpose of locating the sign.     D.  Computation of Maximum Total Permitted Sign Area.     The permitted sum of the area of all individual signs shall be computed by applying the  Zoning District formulae contained in Section 10.06.010, Maximum area per sign, to the lot  frontage, building frontage or wall area, as appropriate. Lots fronting on two or more streets  are allowed to calculate the longest street frontage into the allowable allocation to be  identified by the Master Signage Plan.     E.  Computation of Maximum Number of Signs.     Pursuant to Table 10.06.010, each lot is allocated the maximum number of signs allowed per  District. Where indicated, additional signs beyond the identified allowance shall be  determined by the lineal frontage of the lot.     Sec. 10.06.030. ‐ Design Requirements.     A.  Monument Signs and Low‐Profile Pole Signs.     Monument signs or low‐profile pole signs are the only permanent freestanding sign allowed,  except on properties with IH 35, SH 130, or SH 195 frontage, where pole signs are also  permitted.     1.  Monument Signs.     a.  Monument signs shall have only two sign faces.     b.  The structure of monument signs shall be constructed of materials and colors  compatible with those utilized on the primary buildingʹs facade.     c.  Monument signs located on the same property must be spaced a minimum of 80  feet apart from other freestanding signs for which a permit is required.     d.  A shared monument sign is encouraged. Such a monument sign must be located  on one of the properties included in the sign text.   Page 32 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 18 of 40 Chapter 10  Deleted language is strikethrough       2.  Low‐Profile Pole Signs.     a.  Low‐profile pole signs are permitted on any property as an alternative to  permitted pole or monument signs.     b.  Low‐profile pole signs may have only two sign faces.     c.  Low‐profile pole signs located on the same property must be spaced a minimum  of 80 feet apart from other freestanding signs for which a permit is required.         d.  A shared low‐profile sign is encouraged. Such a sign must be located on one of  the properties included in the sign text.     e.  In the CN, C‐1, MU‐DT, C‐3, BP and IN Districts:     i.  The use of low‐profile pole signs requires the installation of a landscaped  area equal to twice the area of one face of the pole sign. The required  landscaping shall consist of four healthy, nursery stock shrubs, five‐gallon  container size, and ground cover. The required landscaping shall be located  at the base of the pole sign. The owner and subsequent owners of the  Page 33 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 19 of 40 Chapter 10  Deleted language is strikethrough   landscaped property shall be responsible for the maintenance of the  landscaped area.     ii.  For properties in excess of 500 feet of frontage, additional sign square  footage is allowed as determined in Table 10.06.010. The cumulative square  footage of allowed signs may be distributed between the maximum number  of allowed signs with no one sign exceeding 90 square feet in size.     3.  RS RE, RL, RS and REMH Districts.     In the RSRE, RL, RS and REMH Districts externally illuminated free standing signs  shall only be located adjacent to arterial roadways.     B.  Landmark Signs.     To be recognized and designated as landmark signs, an individual sign must be approved  by the procedures adopted by the Historic and Architectural Review Commission. To be  considered for designation, these signs shall exhibit such a unique character, design or  historical significance to be recognized as such to the community.     C.  Building Wall Signs.     1.  The calculation of building wall signage shall be based upon a buildingʹs primary  entrance and building facade as defined in Section 16.02.     2.  Building wall signs may be placed on any portion of the building wall, but may not  exceed the height of the wall. Wall signs shall not project more than eight inches from  the building or structure, may have only one sign face, and must be parallel to the wall  on which it is attached.    3.  Building wall signs may be placed on any face of the building, except those directly  adjacent to, and within 100 feet of a residential property line within a Residential Zoning  District. If the residential zoned property is developed as a Non‐Residential use then  this restriction shall not apply.     4.  Posters, signs, or announcements located in window areas not exceeding 50 percent  (50%) of an individual window area shall not be calculated as an element of total  allowable site signage. Any sign area in excess of the 50 percent (50%) will cause the  entire area of the poster, sign, or announcements to be calculated as an element of total  allowable building wall signage.     5.  In the RS, RL, and RE Districts externally illuminated building wall signs shall only be  located on properties fronting on arterial roadways.   Page 34 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 20 of 40 Chapter 10  Deleted language is strikethrough       D.  Pole Signs on Properties with IH 35 Frontage.     Pole signs are permitted on properties with IH 35 frontage, which are zoned C‐1, C‐3, BP,  or IN, provided they meet the following requirements:     1.   Height limit shall be 28 feet, but additional height may be allowed using the following  as determining factors:     a.  This additional allowance will be determined by measuring the difference between  the elevation of the property at the proposed location of the sign and the elevation  of IH 35.     b.  Determination of the elevational difference shall be measured by projecting a  perpendicular line from the center line of the proposed location of the sign to the  main IH 35 roadway section nearest the sign.     c.  The allowance will only apply for properties and sign locations that are  determined to be lower in elevation than the IH 35, as determined by Subsection  b. above.     2.   Maximum area shall be 225 square feet per face.     3.   Pole sign shall have only two sign faces.     4.   Properties with IH 35 frontage may have only one pole sign for each 600 feet of frontage  or fraction thereof. Pole signs shall be spaced a minimum of 100 feet apart.     Page 35 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 21 of 40 Chapter 10  Deleted language is strikethrough   5.   All signs shall maintain a minimum clearance from electric power lines of ten feet  horizontally and 15 feet vertically or as otherwise may be required by the utility  provider. Any relocation of power lines to provide this clearance will be at the expense  of the sign owner.     6.   Pole Signs shall be spaced a minimum of 200 feet from a High Profile Monument Sign.     E.  Governmental Flags.     Flags of the United States, the State, the City, foreign nations having diplomatic relations  with the United States, and any other flag adopted or sanctioned by an elected legislative  body of competent jurisdictionFlags are permitted in all zoning districts provided that they  meet the following requirements.:     1.  Unites States flags shall be flown in accordance with the protocol established by the  Congress of the United States for the Stars and Stripes, Title 4, Chapter 1 ‐ The Flag.   Reserved.    2.  Governmental flags Flags shall not exceed the Maximum Height and Size as provided  for in Table 10.06.010 of Section 10.06, Sign Design and Area Regulations. The overall  measurement of the flag poleflagpole shall not exceed 25 feet in height as measured from  the base of the pole to the top regardless of where the governmental flag poleflagpole is  located.     3.  When a flagpole is located on the top of a roof, the placement and attachment of the pole  shall meet the Building Code for wind and structural loading requirements. The plan  design criteria shall provide the proposed location, attachment method to the structure  and wind load resistance. A building permit shall be required for this type of installation.     4.  Within Zoning Districts CN, C‐1, MU‐DT, C‐3, BP, and IN, ground mounted flag poles  can exceed the 25‐foot height limit but shall not exceed the maximum building height as  allowed in that district.     F.  Marquee Sign.     The following sign design standards shall be used in addition to Table 10.06.010 Sign  dimensions by District for a marquee sign as defined in Section 16.02. The definition of a sign  in Section 16.02 shall also apply for all types of signs used within this section.     1.  Wall signs for the advertisement of the business will be allowed for the maximum area  per square foot as allowed in the district as provided in Table 10.06.010 and the  conditions of Subsection 10.06.030.C.     Page 36 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 22 of 40 Chapter 10  Deleted language is strikethrough   2.  Monument signs shall be the only sign allowed per lot as allowed in the district as  provided in Table 10.06.010 and the conditions of Subsection 10.06.030.A. Exception:  Pole signs on properties with IH 35 frontage. For this exception, movie, performing art  theaters, or athletic complexes would be allowed on either the pole sign or the marquee  sign, as defined in Section 16.02 for marquee.     3.  A marquee sign shall be located on the buildingsbuilding’s primary facade and over the  main entrance.     4.  The calculation for the total square foot area of a marquee sign shall be based solely upon  the number of movie screens or stages provided in the building. In addition to the  maximum area per square foot sign allowance for business advertisement, an additional  one square foot per linear foot of primary facade for marquee signs can be allowed. For  the purpose of this section a marquee sign is considered to be a maximum 6ʹ x 24ʹ panel.  The ratio would equal three movies or stage titles to one panel. The maximum area of  two square feet per linear foot of primary facade shall not be exceeded. The maximum  height shall not exceed 20 feet.     5.  Posters or announcements shall be located directly under the marquee sign and shall not  exceed 50 percent (50%) of the area contained within the overall maximum width of the  marquee sign. In this case, these types of signs shall not be calculated as an element  towards the total maximum sign area. When located outside, these types of signs shall  be located in protective cases. An excess of the 50 percent (50%) will cause the entire area  to be calculated as an element of total allowable site signage. The Subsection 10.03.020.K  for provisionally exempt signs shall also apply to this section.     G.  High Profile Monument Signs.     High profile monument signs are permitted on properties with SH 130, SH 195, and IH‐35  frontage, which are zoned C‐1, C‐3, BP, or IN, provided they meet the following  requirements:     1.  Height limit shall be 28 feet but additional height may be allowed using the following  as determining factors:     Page 37 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 23 of 40 Chapter 10  Deleted language is strikethrough       a.  This additional allowance will be determined by measuring the difference between  the elevation of the property at the proposed location of the sign and the elevation  of the main lanes.     b.  Determination of the elevation difference shall be measured by projecting a  perpendicular line from the center line of the proposed location of the sign to the  center line of the main lanes nearest the sign.     c.  The allowance applies only to properties and sign locations that are determined to  be lower in elevation than the main lanes, as measured by Subsection b. above.     2.  Maximum area shall be 225 square feet per face.     3.  High profile monument signs shall have only two sign faces.     4.  Properties with SH 130 or SH 195 frontage may have only one high profile monument  sign for each 600 feet of frontage. High profile monument signs shall be spaced a  minimum of 600 feet apart. If a property or commercial or industrial subdivision has less  than 600 feet of frontage on SH 130 or SH 195 a high profile monument sign shall not be  permitted.     5.  Properties with IH‐35 frontage may have only one high profile monument sign for each  600 feet of frontage or fraction thereof. High profile monument signs shall be spaced a  minimum of 400 feet apart.     6.  High profile monument signs shall be spaced a minimum of 200 feet from a pole sign.   Page 38 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 24 of 40 Chapter 10  Deleted language is strikethrough     7.  All signs shall maintain a minimum clearance from electric power lines of ten feet  horizontally and 15 feet vertically or as otherwise may be required by the utility  provider. Any relocation of power lines to provide this clearance will be at the expense  of the sign owner.     H.  Signs Along Streets, Public Ways or Railroads.     1.  Except as set forth below, no sign may be placed on or over the area located:    a. within ten feet of the back of the street curb for City or County rights‐of‐way or  the actual right‐of‐way, whichever is greater;    b. within 25 feet for State rights‐of‐way or the actual right‐of‐way, whichever is  greater;    c. if no curb exists, within the impervious surface of the street;    d. if unpaved, within ten feet of the portion of the City ordinarily used for vehicular  travel;    e. within the median of a street;    f. across the public right‐of‐way line;    g. across a railroad right‐of‐way; or     h. in the restricted areas at street intersections designated by Section 12.44.010 of the  City of Georgetown Municipal Code (“sight triangles”).    2.  The following may be placed on or over the areas listed in 10.06.030.H.1:     a.  Public signs erected by or on behalf of a governmental body to post legal notices,  identify public property, convey public information, and direct or regulate  pedestrian or vehicular traffic.    b.  Bus stop signs erected by a public transit company.     Sec. 10.06.040. – Municipal Wayfinding Signs Reserved.     Notwithstanding any conflicting provisions, the City shall allow directional signs, including  subdivision directional signs, consistent with the Cityʹs Wayfinding Sign Program, as may be  Page 39 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 25 of 40 Chapter 10  Deleted language is strikethrough   amended from time to time. The location, design, construction, installation, and maintenance of  these signs shall be the responsibility of the City.     Sec. 10.06.050. – Multi‐Tenant Signs.     Developments containing two or more businesses, whether in a single building or multiple  buildings, shall share a sign structure for advertisement of multiple businesses located within the  development. This provision is applicable to businesses located on the same lot upon which the  sign is located as well as to businesses located upon different lots within the development. Such  signs shall comply with the following:     A.  The lot or lots involved must be contiguous with one another, and constitute a single  cohesive development;     B.  The sign(s) must be located on a lot that one of the advertised businesses occupies;     C.  The sign shall be designed in the overall architectural style of the buildings within the  development;     D.  The signs may be any sign type that is otherwise allowed by this chapter;     E.  Private streets within the boundaries of the development are treated as public rights‐of‐way  for purposes of determining allowable signage;     F.  Individual pad or lease sites, defined in the approved Site Plan, are treated as separate lots  for purposes of determining allowable signage;     1.  Businesses shall not be allowed advertising on both the multiple tenant (shared) sign  and another free standing business identification sign;     2.  Monument signs, used as multi‐tenant signs for developments with four or more  tenants, may have an allowable sign area not to exceed 64 square feet.     G.  In addition to signage that would otherwise be allowed on a lot for business identification  purposes, one additional monument sign not exceeding five feet in height and 32 square feet  in area may be located at each intersection of public roadways and/or private roadways for  purposes of directing traffic to various areas and businesses within the development;     H.  All other provisions of this ordinance shall be applicable to this sign category, including but  not limited to, allowed number based on road frontage (multiple lot developments are  treated as a single lot for this purpose), allowable size as a function of Zoning District,  spacing, illumination, materials, etc.     Page 40 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 26 of 40 Chapter 10  Deleted language is strikethrough   Sec. 10.06.060. – Subdivision Entry Signs.     Subdivision entry signs are allowed at the primary entrance into a subdivision, subject to the  following standards:     A.  Subdivision entry signs are allowed at one primary entrance unless the subdivision has  entrances on two different major arterials, in such case an entrance sign may be placed on  each of the major arterial roadways.     B.  Subdivision entry signs must be monument signs, subject to the definition of this Code, and  may contain a maximum of 40 square feet per sign face with a maximum height of six feet.     C.  Subdivision entry signs must be constructed of stone, brick, or other masonry material(s)  compatible with surrounding development.     D.  Subdivision entry signs must be set back a minimum of five feet from the property line  outside of the required sight triangle (Subsection 12.03.050.E.1) and located outside of any  drainage easement.     E.  Subdivision entry signs must provide a landscaped area equal to twice the area of the sign  face, providing one five‐gallon shrub for every ten square feet of landscaped area.     1.  Irrigation must be provided consistent with the standards of Section 8.06.050.     2.  The owners and subsequent owners of the landscaped property shall be responsible for  the maintenance of the landscaped area.    SECTION 10.07. – TEMPORARY SIGNS     All temporary signs shall be required to receive a Temporary Sign Permit, following the  procedures of Section 3.18 of this Code. Temporary signs may be allowed for permanent uses,  temporary uses or for TemporarySpecial Events, all of which may be addressed separately in this  section. All temporary signs shall be designed, constructed, and maintained in accordance with  the following standards:     A.  All signs shall comply with applicable provisions of the City Code at all times.     B.  Except for banners, flags, temporary signs, and window signs conforming in all respects  with the requirements of this Code, all signs shall be constructed of durable materials and  shall be permanently attached to the ground, a building, or another structure by direct  attachment to a rigid wall, frame, or structure.     Page 41 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 27 of 40 Chapter 10  Deleted language is strikethrough   C.  All signs shall be maintained in good structural condition, in compliance with all building  and electrical Codes, and in conformance with this Code, at all times.     D.  All signs shall maintain a minimum clearance from electric power lines of ten feet  horizontally and 15 feet vertically or as may otherwise be required by the utility provider.  Any relocation of power lines to provide this clearance will be at the expense of the sign  owner or as otherwise required by the electrical utility.     E.  Any spotlights allowed to illuminate signs or sign illumination shall be shielded such that  their light source cannot be seen from abutting roads or properties.     Sec. 10.07.010. –‐ Temporary Signs on Private Property.     A.  Temporary signs on private property, not including those for Temporary Events, are limited  to banners and non‐exempt window signs and shall be subject to the following requirements,  unless otherwise set forth in this section:     A.1.  Term.     A temporary sign permit allows the use of a temporary sign for no more than 45 days  from date of issuance.     B2.  Number.     Only onetwo temporary sign per lot shall be allowed.     C3.  Other Conditions.     A temporary sign is allowed only in designated Districts as set forth in this  chaptersection and shall be subject to all other requirements of that District.     4.  Restrictions.     a. Temporary signs on private property are limited to banners, window signs, or yard  signs measuring no more than four square feet in area, unless otherwise set forth  in this section.     b. Temporary signs on private property shall comply with the setback and height  limitations of Table 10.06.010 for the Zoning District in which the property is  located.     c. Attachments to the signs, such as balloons or streamers, shall not be allowed.    Page 42 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 28 of 40 Chapter 10  Deleted language is strikethrough   B.  Temporary signs on private property by a holder of a Special Event Permit shall be  subject to the following requirements:    1.  Applicability.     This section applies only to signs placed by a holder of a Special Event Permit under  Chapter 12.24 of the Georgetown Code of Ordinances. Specific events, activities or  sign regulations that are expressly addressed elsewhere in this Code shall apply and  nothing in this section shall modify those other provisions or standards.     2.  Location.    Temporary signs placed on private property under this section must be approved by  the property owner. Signs placed on private property must meet design regulations  relating to setback and other location requirements of the particular zoning district of  the property, as outlined in Table 10.06.010.    3.  Size and Height Restrictions.    Signs placed on private property must meet design regulations relating to size and  height of the particular zoning district of the property, as outlined in Table 10.06.010  of this Code.     4.  Term.    Temporary signs placed on private property under this section shall be erected no  more than 15 days prior to the permitted event and must be removed within three (3)  days following the last day of the event. No special event signage shall be in place  longer than 30 days.     C.  Temporary signs on private property at a Construction Site shall be subject to the  following requirements:    1.  Applicability.    This subsection applies to Construction Site Signs, as defined in Chapter 16.    2.  Size Restrictions.    These signs shall not exceed a total of 100 square feet or the total area permitted under  Section 10.06.010 of this Code.     3.  Term.  Page 43 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 29 of 40 Chapter 10  Deleted language is strikethrough     Such signs shall be removed within one week following Final Inspection or  Acceptance by the City, as applicable.     4.  Other Requirements.    The State, City, County, or other governmental entity permitting the work may  impose additional requirements on the Construction Site sign as a condition of its  approval of any such permit.     D.  Temporary signs placed by a registered homeownerʹs or neighborhood organization,  which consists solely of the homeowners of a subdivision or neighborhood, provided the  following provisions are met:     1.  Signs shall be placed only within the boundaries of the applicable subdivision or  neighborhood, in locations permitted by this Chapter.      2.  Signs shall not be posted more than 48 hours prior to the beginning of an event or  item requiring notice. All such signs shall be removed by the  homeowner/neighborhood association no later than 24 hours following the event.     3.  Homeowner/neighborhood association signs shall not exceed four (4) square feet in  size.     Sec. 10.07.020. – Temporary Street BannersSigns on Public Property and Right‐of‐Way.     The City Manager is authorized to establish procedures for the permitting and installation of  temporary street banners placed in public right‐of‐way. Such banners shall be allowed for the  following public events upon compliance with the established procedures:     A.  Events of a charitable or humanitarian nature;     B.  Events of an educational, scholastic, or artistic nature;     C.  Other events of community or public interest which are non‐political in nature and are  for the benefit of a non‐profit group.  Temporary signs on public property shall not require a permit if installed by the City, the County,  the State, the federal government, or another political subdivision of the state who owns or  controls the property.    Sec. 10.07.030. – Light Pole Mounted BannersReserved.     Page 44 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 30 of 40 Chapter 10  Deleted language is strikethrough   Light pole mounted banners, as defined in Section 16.02, shall be allowed pursuant to Subsections  A. and B. below. For purposes of this subsection only, light pole mounted banners shall be  collectively referred to as ʺbanners.ʺ     A.  All banners shall comply with the following:       1.  Limited to not more than one banner on any light pole;     2.  Limited to no more than two feet by six feet in exterior dimension and 12 square  feet in area per banner;     3.  Minimum height of six feet as measured from adjacent grade to the bottom of the  banner;     4.  Maximum height of 12 feet to the top of the banner;     5.  Banners shall be maintained in good repair; should they become excessively faded,  tattered, or torn, they shall be replaced or removed;     6.  Banners shall not be illuminated, except for indirect lighting associated with the  main lamp of the light pole to which it is mounted.     B.  The following light‐pole mounted banners shall be allowed:     1.  Banners in the Downtown.     Banners are allowed in the Downtown, but are limited to the advertising of  community events, seasonal themes, etc. sponsored by a government entity or by a  non‐profit community organization with approval by the City pursuant to  established special permitting procedures (City Manager or Special Events  Committee approval).     Page 45 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 31 of 40 Chapter 10  Deleted language is strikethrough   2.  Banners in Residential Subdivision Street Right‐of‐Way.     Banners are allowed along collector‐level or higher classification streets within the  platted boundaries of a residential subdivision and shall be designed with one  overall, uniform design scheme. Such banners are limited to subdivision  identification or seasonal decorations and works of art, and shall not be spaced  closer than 300 feet apart. Such banners require the approval of the applicable  electrical utility and the custodian of the public right‐of‐way, in addition to a sign  permit from the Division of Community Development.     3.  Banners in Commercial Subdivision Street Right‐of‐Way.     Banners are allowed along collector‐level and higher classification streets within the  platted boundaries of a commercial subdivision and shall be designed with one  overall, uniform design scheme. Such banners are limited to subdivision  identification, shopping center or campus identification or seasonal decorations and  works of art, and shall not be spaced closer than 300 feet apart. Such banners must  be approved by the applicable electric utility and the custodian of the public right‐ of‐way, in addition to receiving a permit from the Division of Community  Development.     4.  Banners on Perimeter of Private Property.     Banners identified in Subsections 2. and 3. above and subject to all the provisions  identified therein except message and spacing, may be installed along the periphery  within ten feet of property lines fronting public or private streets of collector‐level  or higher classification in lieu of the public right‐of‐way. Such banners may  advertise products and services available on the site. Spacing shall be no closer than  80 feet between banners. Such banners shall be allowed in addition to site signage  otherwise allowed by this ordinance, and shall require approval of a sign permit.  Fees shall be based on the overall banner package, not on a per‐banner basis.     5.  Banners on the Interior of Private Property.     In addition to banners authorized in Subsections 1. through 4. above, banners shall  be allowed within the interior of the parking lot zoned C‐3 or more permissive, and  may advertise products and services available on the site. The number of banners  shall not exceed one per 50 vehicle parking spaces. Such banners shall be allowed  in addition to site signage otherwise allowed by this ordinance, and shall require  approval of a sign permit. Fees shall be based on the overall banner package, not on  a per‐banner basis.     Sec. 10.07.040. – Temporary Signs for Temporary EventsReserved.   Page 46 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 32 of 40 Chapter 10  Deleted language is strikethrough     A.  Applicability.     This section applies only to ʺEventsʺ as that term is defined in Section 12.24.010 of the  Georgetown Code of Ordinances or as a public gathering held on public or private property.  These events may include, for example, gem and mineral shows, quilt shows, etc. but do not  include promotional sales events for existing commercial uses. Specific events, activities or  sign regulations that are expressly addressed elsewhere in this Code shall apply and nothing  in this section shall modify those other provisions or standards.     B.  Temporary Event Sign Limitations.     Temporary Event signs must meet the following criteria:     1.  Location.     a.  Signs may not be placed in any state rights‐of‐way maintained by the Texas  Department of Transportation.     b.  Signs placed on private property must be approved by the property owner.     c.  Signs must be placed at least three feet from the edge of the pavement or curb.     2.  Size and Height Restrictions.     a.  Signs placed in the public right‐of‐way shall be limited in area to four square feet.  Height is limited to three feet from grade.     b.  Signs placed on private property must meet design regulations relating to size and  height of the particular zoning district of the property.     3.  Duration of Signage Allowed.     a.  Signs in the public right‐of‐way shall be in place no more than 24 hours prior to the  first day of the event and must be removed within 24 hours following the last day  of the event.     b.  Signs placed on private property shall be erected no more than 15 days prior to the  event and must be removed within three days following the last day of the event.     c.  No temporary event signage shall be in place longer than 30 days.     4.  Restrictions.   Page 47 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 33 of 40 Chapter 10  Deleted language is strikethrough     a.  Signs shall not be placed in a manner that inhibits or interferes with vision or  otherwise affects public health, safety, and welfare.     b.  No lighting, balloons, streamers, or other devices or materials may be attached to  the sign.     c.  Signs may not be placed on any roadway appurtenances, including but not limited  to bridges, traffic control devices, official signs, sign supports, light standards, poles,  and delineators.     d.  Sponsorships of the event may be indicated on the signs, but must be secondary to  the promotion of the event.     e.  Signs may be placed no more than one time in six months for the same event.     5.  Spacing.   Signs for the same temporary event may not be placed less than 100 yards apart along a  street right‐of‐way.     Sec. 10.07.050. – Temporary Off‐Premise Signs for Open Houses and Model HomesReserved.     A.  Applicability.     The City has established a program whereby homeowners, realtors, and builders may place  temporary off‐premise signs in certain City rights‐of‐way for the sole purpose of directing  prospective buyers to an ʺOpen Houseʺ or builderʹs ʺModel Homeʺ for sale of a new or  existing Single‐family or Two‐family home or condominium intended for residential  occupancy. A License Agreement for these open house signs in City right‐of‐way shall be  required for such signs before being erected. Except as noted in this section, off‐premise signs  for Open Houses and builder Model Homes shall not be permitted.     B.  Temporary Open House Sign Limitations.     Temporary Open House signs must meet the following criteria:     1.  Eligibility.     Those eligible to utilize such signs are a homeowner acting as own realtor, realtor, or  builder.     2.  Location and Spacing.     Page 48 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 34 of 40 Chapter 10  Deleted language is strikethrough   a.  Signs may be located in the City owned or controlled public right‐of‐way that is also  within 75 feet of the center point of the intersection of any City controlled local or  collector street other than those noted in Subsections b. and c. below.     b.  Signs shall not be placed on Austin Avenue right‐of‐way between Williams Drive  and Leander Road; University Avenue right‐of‐way between Hutto Road and  Scenic Drive (if University becomes City right‐of‐way); nor within the area bounded  by 6th Street, Rock Street, 9th Street, and Church Street.     c.  Signs shall not be placed in any State rights‐of‐way maintained by the Texas  Department of Transportation, including the following:     i.  F.M. 2243 (Leander Road).     ii.  F.M. 2238 (Williams Drive from F.M. 3405 west).     iii.  F.M. 1460.     iv.  F.M. 971.     v.  State Highway 29 (University Avenue).     vi.  State Spur 26 (South Austin Avenue from Leander Road south).     vii.  State Spur 158 (North Austin Avenue from Williams Drive north).     viii.  Interstate Highway 35.     ix.  State Highway 130.     x.  State Highway 195.     d.  Open House signs shall not be permitted to interfere with the sight triangle between  heights of three feet and seven feet as measured from the crowns of the adjacent  streets. See Subsection 12.03.050.E.1.c of this Code.     e.  Open House signs shall be placed at least three feet from the edge of pavement.     f.  The City reserves the right to require that signs be moved to other locations in the  public right‐of‐way as to address safety concerns or to limit the undue accumulation  of signs at any particular location.     3.  Size and Height Restrictions.   Page 49 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 35 of 40 Chapter 10  Deleted language is strikethrough     Open House signs shall not exceed three square feet. Height is limited to three feet from  grade.     4.  Duration of Signage Allowed.     Open House signs shall be in place no earlier than the 12:00 noon on Saturdays or  Sundays and removed no later than 6:00 p.m. on Saturdays or Sundays. Between the  hours of 6:00 p.m. on Saturday and 12:00 noon on Sunday the signs must be taken down.     5.  Number of Signs Permitted.     Except as provided below, an applicant shall place only one Open House/Model Home  sign at any approved off‐premise location. If a realtor or builder has more than one  property offered for sale in the same neighborhood for which the realtor/builder is  conducting an open house, they may place more than one sign at any location, provided  that each such sign shall show the address of the property offered for sale. A maximum  of three directional signs per open house/model home is allowed off‐premise.     6.  No lighting, balloons, streamers, or other devices or materials may be attached to the  sign.     7.  Signs may not be placed on any roadway appurtenances, including but not limited to  bridges, traffic control devices, official signs, sign supports, light standards, poles, and  delineators.     8.  The holder of the license shall receive written permission from the property owner  adjacent to the Cityʹs right‐of‐way prior to locating a sign in said right‐of‐way. If  requested, the licensee shall provide the City with a copy of the written permission. If a  property owner indicates that they did not grant permission for the sign placement, the  City has the right to require that the sign be removed or to cause it to be removed.     C.  Definitions.     See Section 16.02 of this Code for definitions of the following terms as they relate to this  section:     1.  Homeowner acting as own realtor.     2.  Open House/Model Home Sign.     3.  Property.     Page 50 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 36 of 40 Chapter 10  Deleted language is strikethrough   4.  Realtor.     5.  Home Builder.     D.  Review Process.     Review of the temporary off‐premise signs for Open Houses and Model Homes and the  companion License Agreement shall follow the Administrative Review procedures set forth  in Section 3.03.040.     E.  Submission Requirements.     In addition to a completed License Agreement, the applicant shall submit all of the  information required in the UDC Development Manual for sign permits.     F.  Responsibility for Final Action.     The Building Official or designee, is responsible for final action on the License Agreement  and issuing the permit for a temporary open house sign. For each License purchased, the  applicant will be issued a sticker which shall be placed on each of the Open House/Model  Home Signs permitted. Each sign placed in the right‐of‐way must have a sticker attached  issued in accordance with this section.     G.  Expiration.     Unless terminated sooner, the License shall expire one year from the effective date of the  agreement.     H.  Termination.     The City has the right to terminate the License Agreement. The City shall provide  written notice at least 45 days in advance to the Licensee of the Cityʹs intent to terminate the  License Agreement. If the License Agreement is terminated, all signs shall be removed  immediately by the Licensee. Any signs not removed within 48 hours of the termination date  shall become the property of the City. The Licensee shall be entitled to a pro‐rate refund of any  fees paid if the termination is within 180 days of the issuance of the License Agreement.  Otherwise, the Licensee will not be entitled to a refund.     Section 10.08. ‐ HOMEBUILDER WAYFINDING SIGNS    10.08.010.  ‐ Erection and Maintenance of Signs.      Page 51 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 37 of 40 Chapter 10  Deleted language is strikethrough   A.  The City shall contract with an individual, firm, group, or association in this state to erect  and maintain Homebuilder Wayfinding Signs at appropriate locations along an eligible city  roadways.    B.  A contract under this section shall provide for:    1.  The assessment of fees to be paid to a contractor by a commercial establishment eligible  for display on the Homebuilder Wayfinding Sign; and    2.  Remittance to the City of at least 10 percent of the fees collected by the contractor.    C.  The City shall make a written award of a contract to the offeror whose proposal offers the  best value for the City.  In determining the best value for the City, the City may consider:    1.  Revenue provided to the City by the contractor;    2.  Fees to be charged eligible businesses or agricultural interests for inclusion on the signs;    3.  The quality of services offered;    4.  The contractorʹs financial resources and ability to perform; and    5.  Any other factor the City considers relevant.    D.  To the extent of any conflict, this section prevails over any other ordinance relating to the  method of the purchasing of goods and services by the City.    10.08.020. ‐ Regulation of Signs.      A.  The City Manager, or his or her designee, shall:    1.  Regulate the content, composition, placement, erection, and maintenance of  Homebuilder Wayfinding Signs and supports on an eligible roadway right‐of‐way; and    2.  Adopt rules necessary to administer and enforce this section.    B.  A Homebuilder Wayfinding Sign may not:    1.  Contain a message, symbol, or trademark that resembles an official traffic‐control  device; or    2.  Be divided into more than six panels that contain homebuilder names.    Page 52 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 38 of 40 Chapter 10  Deleted language is strikethrough   C.  The City Manager, or his or her designee, shall adopt rules, in accordance with applicable  federal law, regulations, and guidelines, for determining eligible roadways along which  Homebuilder Wayfinding Signs may be located.      10.08.030. ‐ Eligibility for Display on Sign.      A.  A homebuilder, to be eligible to have its name displayed on a Homebuilder Wayfinding  Sign, must have a model home open to the public located not more than 0.3 miles from an  intersection on an eligible roadway.  If no homebuilder participating or willing to participate  in the Homebuilder Wayfinding Sign program has a model home located within 0.3 miles of  an intersection, the City Manager, or his or her designee, may grant permits for homebuilders  with model homes located not farther than:    1.  0.6 miles from the intersection;    2.  0.9 miles from the intersection if no homebuilder participating or willing to participate  in the program has a model home located within 0.6 miles from the intersection;    3.  1.2 miles from the intersection if no homebuilder participating or willing to participate  in the program has a model home located within 0.9 miles of the intersection; or    4.  1.5 miles from the intersection if no homebuilder participating or willing to participate  in the program has a model home located within 1.2 miles of the intersection.    B.  A homebuilder participating in the program must _________________.    Sec. 10.08.040. ‐ Duty not to Discriminate.      A homebuilder identified on a Homebuilder Wayfinding Sign shall conform to all applicable laws  concerning the provision of public accommodations without regard to race, religion, gender,  sexual orientation, national origin, age, or disability.    Sec. 10.08.050. ‐ Placement of Signs.      A.  The contractor installing a Homebuilder Wayfinding Sign shall place the sign so that:    1.  The sign is at least 80 feet from the previous intersection and at least 80 feet from the  intersection from which the model home is accessible;    2.  Two signs having the same legend are at least 80 feet apart, but are not excessively  spaced; and    Page 53 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 39 of 40 Chapter 10  Deleted language is strikethrough   3.  A motorist, after following the sign, can conveniently return to the eligible roadway and  continue in the original direction of travel.    B.  If the model home is not visible from an intersection, additional signs may be placed along  the intersecting roadway.    C.  A Homebuilder Wayfinding Sign that is placed along the intersecting roadway must be a  duplicate of the corresponding homebuilder logo sign, except that the intersecting roadway  sign must:    1. Be smaller;    2.  Include the distance to the commercial establishment; and    3.  Include directional arrows instead of directions shown in words.    Sec. 10.08.060. ‐ Disposition of Funds.      Funds received under this section shall be deposited to the general fund.    Sec. 10.08.070. – Variances.      A.  The City Manager may grant variances, on a case‐by‐case basis, to the eligibility, location,  or placement of Homebuilder Wayfinding Signs, including the roadways along which a sign  may be located.      B.  The City Manager may grant a variance if the City Manager, or his or her designee,  determines that:    1.  The variance would promote traffic safety;    2.  The variance would improve traffic flow;    3.  An overpass, government sign, or other government structure unduly obstructs the  visibility of an existing commercial sign; or    4.  The variance would satisfy other conditions or guidelines prescribed by City Manager  rules authorizing the granting of variances.    C.  The City Manager may not grant a variance to the requirements of this subchapter regarding  supports, content, or composition of signs.      Page 54 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 40 of 40 Chapter 10  Deleted language is strikethrough   SECTION 10.09. ‐ PENALTY    Section 10.09.010. ‐ Unauthorized Erection or Installation of Sign.    Any person or other legal entity who erects, installs, fails to maintain, or fails to remove a sign in  violation of this Code shall be guilty of a misdemeanor and upon conviction shall be subject to  the penalties set forth in Chapter 15 of this Code. Each day any violation or noncompliance  continues shall constitute a separate and distinct offense.    Sec. 10.09.020. ‐ Other Remedies.    Pursuant to Chapter 15 of this Code, in the event of any violation of the sign regulations of this  Code, the City shall have the right to issue a stop work order; withhold approval of any Certificate  of Occupancy, permit, plat, or any other authorization or approval;  disconnect utility services;  or pursue any other remedy provided by State law, and the power of injunction may be exercised  in enforcing this Code whether or not there has been a criminal complaint filed.    Page 55 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 1 of 5 Chapter 16  Deleted language is strikethrough   SECTION 16.02. ‐ DEFINITIONS   The following definitions describe terms found in this Code.   ***   Banner. Any sign or attention‐getting device made of fabric, plastic, or other non non‐rigid  material designed to hang from rope or wire or suspended from a pole to advertise a business,  service, or special event and not mounted in a permanent, rigid frame.   Banner, Light Pole Mounted. Any flexible material mounted between two horizontal supports  projecting at a perpendicular from a light standard in flag fashion. The term includes any rigid  or semi‐rigid sign face or lens mounted in a frame attached to the side of a light standard in a  way to achieve the same effect.   Banner, Street. Any banner hung over or across a city street or other public right‐of‐way.   ***  Flag. Any fabric, banner, or bunting containing distinctive colors, patterns, or symbols used for  the purpose of advertising or drawing attention to a business. Does not include government  flags, which are separate and distinct by definition and treatment in this Codeconveying a  message. A flag shall be considered a sign for purposes of this Code.  Flag, Governmental. Flags of the United States, the state, the city, or foreign nations having  diplomatic relations with the United States, and any other flag adopted or sanctioned by an  elected legislative body of competent jurisdiction.   ***  Home Builder. As it relates to Section 10.07.050 of this Code, a Home Builder is an individual or  company that builds single‐family or two‐family homes or condominiums for residential  occupancy.   Home Health Care Services. A facility primarily engaged in providing skilled nursing services  in the home along with a range of additional services to help patients live independently by  taking care of activities that are essential to daily living. In addition to traditional nursing (such  as changing wound dressings, checking vital signs, and providing tube feedings), these care  giving services may include personal care (such as bathing, dressing, eating, and walking),  homemaker and companion services (such as shopping and paying bills), physical therapy,  medical social services, medications, medical equipment and supplies, 24‐hour home care,  counseling, dietary and nutritional services, speech therapy and audiology.   Homeowner Acting As Own Realtor. As it relates to Section 10.07.050 of this Code, a  Homeowner acting as their own realtor is a person who owns an existing single‐family or two‐ family home or condominium within the corporate limits of City, or its extraterritorial  jurisdiction (ETJ) which is for sale directly to the public.   Page 56 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 2 of 5 Chapter 16  Deleted language is strikethrough   Homeowners Association (HOA). An incorporated non‐profit organization operating under  recorded land agreements through which lot owners pays annual dues and may be subject to a  proportionate share of the expenses for the organizationʹs activities, such as maintaining  common property.   ***  Open House/Model Home Sign (Open House Sign). As it relates to Section 10.07.040 of this  Code, an Open House/Model Home Sign is a sign that contains only the following information:  1) the words ʺOpen House,ʺ 2) the words ʺModel Homeʺ, 3) the words ʺFor Sale by Ownerʺ or  the Realtorʹs or Builderʹs name or logo, 4) the address of the Open House or Model Home, and  5) a directional arrow.   ***  Property. As it relates to Section 10.07.050 of this Code, Property means the Cityʹs right‐of‐way  along all streets in the City other than those noted in Section 10.07.050.   ***  Realtor. As it relates to Section 10.07.050 of this Code, a Realtor is a person who is licensed to  sell real estate in the State of Texas.   ***  Secondary. For the purposes of this Code, ʺSecondaryʺ is equal to, identical to, and often used  interchangeably with ʺAccessoryʺ.   ***  Setback. A measurable distance, dictated by zoning district, from any property line to an  invisible parallel plane, within which certain buildings and structures are prohibited. A setback  is separate and distinct from, but is usually included within, a yard, as that term in defined in  this Code.  ***  Sign. Any device that uses letters, numerals, emblems, pictures, outlines, characters, spectacle  delineation, announcement, trademark, logo, illustrations, designs, figures, or symbols for  advertising purposesto convey a message. The term ʺsignʺ shall also include any use of color  such as bands, stripes, patterns, outlines or delineations displayed for the purpose of conveying  a message, including commercial identification (corporate colors), that comprises more than 20  percent (20%) of any facade or visible roof face. This term shall also include all flags other than  Governmental Flags.   Sign Area. The area of a sign inclusive of the sign face, sign base and sign cabinet.   Page 57 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 3 of 5 Chapter 16  Deleted language is strikethrough   Sign Base. The structure supporting a sign. The sign base is a part of the sign, unless otherwise  specified in Chapter 10 of this Code.   Sign, Billboard. A large freestanding sign, generally supported by a metal frame, and  consisting of one (1) sign face or two (2) parallel sign faces that are oriented in opposite  directions, used for the display of posters, printed, or painted advertisements that generally  directs attention to a location other than the premise on which the sign is located. Includes  “commercial signs” as defined by Chapter 391 of the Texas Transportation Code, “off‐premise  signs” as defined by Chapter 394 of the Texas Transportation Code, and “outdoor signs” as  used in Chapter 216 of the Texas Local Government Code.  Sign Cabinet. The sign cabinet is the structure or border used to differentiate a sign face from  the structure on or against which a sign face is placed.   Sign, Canopy. Any type of sign attached to in any manner or made a part of a canopy.   Sign, Changeable Copy. A sign designed to allow the manipulation of messages through  manual or mechanical means.   Sign, Canopy. Any type of sign attached to in any manner or made a part of a canopy.   Sign, Construction Site Sign. A temporary sign containing graphics, symbols, text or images  securely attached to, or printed directly onto the screening fabric of, a temporary fence or  barrier, or on an active construction site authorized by a City or County permit, as applicable.   Sign, External Illumination. A sign utilizing an artificial or reflective light source mounted or  operated from the outside of the frame of the sign, for the purpose of lighting the sign.   Sign Face. The area of a sign where the name of the business or facility is advertisedmessage is  displayed and the background on which it is placed. Does not include the sign cabinet or frame.   Sign, Homebuilder Wayfinding. A sign installed by, on behalf of, the City of Georgetown that  directs motorists to a model home or model homes of a participating homebuilder(s).  Sign, Identification. An incidental sign of identification or of informational nature bearing no  advertising, unless otherwise specified in Chapter 10 of this Code.   Sign, Illuminated. A sign utilizing an artificial or a reflective light source.   Sign, Incidental. A sign, generally informational, that has a purpose is secondary or incidental  to the permitted use of on the lot property on which it is located, such as ʺno parking,ʺ  ʺentrance,ʺ ʺloading only,ʺ ʺtelephone,ʺ an address, and other similar directives.   Sign, Internal Illumination. A sign utilizing an artificial or a reflective light source mounted or  operated from the inside of the frame of the sign, for the purpose of lighting the sign.   Page 58 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 4 of 5 Chapter 16  Deleted language is strikethrough   Sign, Low Profile Pole. A sign that is mounted on one or more freestanding poles or other  support so that the bottom edge of the sign face is not in direct contact with a solid base or the  ground.   Sign, Marquee. Any sign attached to, in any manner or made a part of a marquee.   Sign, Monument. A sign which is attached directly to the ground or is supported by a sign  structure that is placed on or anchored in the ground and is independent from any building or  other structure.   Sign, Multiple Corporate ‐Tenant. A sign for more than one business at the same location  independent manufacturer, but does not include multiple brands produced by the same  manufacturer.   Sign, Off‐Premise or Off‐Site. Any sign advertising an  business activity or use that is not  conducted on the property on which the sign appears.   Sign, Pole. A sign that is mounted on one or more freestanding poles or other support so that  the bottom edge of the sign face is not in direct contact with a solid base or the ground.   Sign, Portable. Any sign not permanently attached to the ground or other permanent structure  or a sign designed to be transported, including, but not limited to, signs designed to be  transported by means of wheels; signs converted to A or T frames; sandwich board signs;  balloons used as signs; umbrellas used for advertising; and signs attached to or painted on  vehicles parked and visible from the public right‐of‐way, unless said vehicle is used in the  normal day‐to‐day operations of the business.   Sign, Projecting. Any sign affixed to a wall of a building in a non parallel manner.   Sign, Sandwich Board. An advertising or business ground sign constructed in such a manner  as to form an “A” or a tent‐like shape, hinged or not hinged at the top; each angular face held at  an appropriate distance by a supporting member. Also known as A‐Frame or T‐Frame signs.   Sign, Suspended. Any type of sign that is suspended from the underside of a predominantly  horizontal plane surface, such as a porch or canopy, and is supported by such surface.   Sign, Temporary. Any sign that is not intended to be permanent.   Sign, Wall. A sign which is fastened to or painted on the wall of a building or structure in such  a manner that the wall becomes the supporting structure for or forms the background surface  of, the sign. Wall signs shall not project more than eight inches from the building or structure,  may have only one sign face, and must be parallel to the wall on which it is attached.   Sign, Window. Any sign that is placed inside a window or upon the window or upon the  window panes or glass and is intended to be visible from the exterior of the window.  Merchandise displays shall not be considered window signs.   Page 59 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 5 of 5 Chapter 16  Deleted language is strikethrough   ***  ***  Page 60 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20  Added language is underlined Page 1 of 2 Chapter 5  Deleted language is strikethrough   Sec. 5.04.020. ‐ Commercial Use Limitations.     All commercial uses shall meet any applicable provisions of the City Code of Ordinances, in  addition to the following limitations. Outdoor display and storage requirements, if applicable,  shall be met in accordance with Section 5.09.     ***    S.  Automobile Sales, Rental or Leasing Facility.     An automobile sales, rental or leasing facility is permitted in accordance with Table  5.04.010 and subject to the following standards and limitations:     ***    5.  Signage for Automobile Sales Facilities.     The following additional signage applies only to automobile sales facilities along  the I.H. 35 northbound frontage road, from the southernmost boundary of the City  up to, and including, the one lot north of Fox Drive.     a.  High profile monument signs are encouraged for sites with multiple corporate  tenants consistent with Section 10.06.030.G. Auto dealerships may have an  increased height for a high profile monument sign located along the I.H. 35  frontage road of up to 35 feet. No more than one sign shall be permitted at the  35‐foot height. No additional height shall be permitted. The structure of high  profile monument signs shall be constructed of stone or brick materials and be  colors compatible with those utilized on the primary buildingʹs facade.     b.  Additional high profile monument signage shall be allowed for those sites with  multiple corporate tenants. The maximum amount of additional signage shall  be limited to an increase of ten percent (10%) of the total pole sign square  footage permitted in Chapter 10. The maximum high profile monument sign  height that utilizes the increased size shall be limited to 28 feet. The minimum  road frontage of 600 feet for a high profile monument sign is reduced to 250 feet  for this section and the spacing of 600 feet between high profile monument  signs shall be reduced to 250 feet for this section.     c.  A maximum of two high profile monument or pole signs per site are permitted  for sites with multiple corporate tenants with the maximum sign height of 25  feet and a maximum of 100 square feet per sign.     Page 61 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20  Added language is underlined Page 2 of 2 Chapter 5  Deleted language is strikethrough   d.  For those sites with multiple corporate tenants the allowed wall signage may  be increased ten percent (10%) to accommodate the additional tenant.     e.  For the purposes of this sectionIn accordance with Section 10.03, entrance and  interior directional signs that comply with the provisions of Chapter 10 of this  Code shall not be counted toward the total allowed signage for the site;  however, all other provisions of Chapter 10 shall apply to these signs. The  business name shall be allowed to aid in direction in accordance with Section  10.03.020.C.     f.  No signs, balloons, banners, etc. shall be located within the public right‐of‐way.     g.  Balloons.     i.  For the purposes of this section, balloons shall not be deemed as  fluttering/undulating/moving signs pursuant to Section 10.04.     ii.  Balloons shall be tethered, attached, or anchored so as not to create any  safety hazards by blowing into signs, utility lines, lights, etc.     iii.  Balloons and their tethering mechanism shall not exceed 35 feet in height.     iv.  Balloons for vehicle sales facilities shall not exceed a total of 50 balloons  per 100 feet of I.H. 35 road frontage.     h.  Banners shall be permitted pursuant to Section 10.07.020Reserved.     ***  ***  Page 62 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 1 of 1 City Code Chapter 12.12  Deleted language is strikethrough   CHAPTER 12.12. ‐ ADVERTISING SIGNS AND BANNERS     Sec. 12.12.010. ‐ Putting up placards, etc., in public places.     A.  It is unlawful for any person to fasten, tack, nail, tie, glue, paste or maintain any placard,  poster, banner or any other material anywhere on the streets, sidewalks, curbs, gutters,  signal light posts or bases, street light posts or bases, telephone posts or electric posts in the  City or to cause the same to be done.     B.  This section does not apply to any officer of the City, the state or the United States who  may place upon such objects, by tying with strings or ties, any posters or placards in the  interest of public health and safety.       Sec. 12.12.020. ‐ Banners, etc., over public streets.     It is unlawful for any person to build, construct, fasten, tie or maintain any banners, streamers  or other similar materials anywhere in the City city in such a manner that the same shall be  above, over and across any public street within the Citycity, ; provided, tThe provisions of this  section do not apply to activities of an officer or employee of the City, the State or the United  States acting on behalf of said governmental agency charitable organizations or any person  engaged in promoting a nonprofit civic enterprise who has secured approval from the City  Manager and has furnished a bond indemnifying the City from any personal injury or property  damage which might result from the building, constructing, fastening, tying, disconnecting or  maintaining any such banners, streamers or other similar material above, over or across any  public street within the City. Upon presenting to the Chief of Police evidence of approval by the  City Manager and evidence of securing the bond as required above, the Chief of Police shall  issue a permit to such charitable organization or any person engaged in promoting a nonprofit  civic enterprise to engage in the activities otherwise prohibited in this chapter.   Page 63 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 1 of 4 City Code Chapter 12.16  Deleted language is strikethrough   CHAPTER 12.16. ‐ SIGNS ADJACENT TO FREEWAYS     Sec. 12.16.010. ‐ Scope.     This chapter applies to signs located within the City or its Extraterritorial Jurisdiction (ETJ), and  within 660 feet of the nearest edge of the right‐of‐way of interstate and Federal‐aid primary  highway systems, being those highways designated as I‐35 and U.S. 81, or adjacent to and  visible from SH‐130 as set forth herein.     Sec. 12.16.020. ‐ Definitions.     As Words used in this chapter shall have the same meaning as in the Texas Highway  Beautification Act, Chapters 391 et seq. of the Texas Transportation Code, or Chapter 10 of the  City’s Unified Development Code, as applicable., the following words have the meanings set  forth in this section:   ʺErectʺ means to construct, build, raise, assemble, place, affix, attach, create, paint, draw or  in any other way bring into being or establish, except when performed incidental to the change  of an advertising message or to normal maintenance or repair of an existing sign.   ʺFreewayʺ means a divided highway with full control of access.   ʺMain‐traveled wayʺ means the through traffic lanes exclusive of frontage roads, auxiliary  lanes and ramps.   ʺOfficial signsʺ means directional and other official signs authorized by law, including  signs pertaining to natural wonders and scenic and historic attractions, and signs which have as  their purpose the protection of life and property.   ʺOn‐premise signsʺ means signs advertising the sale or lease of the property on which they  are located, and signs advertising activities conducted on the premises upon which they are  located.   ʺSignʺ means an outdoor sign, light, display, device, figure, painting, drawing, message,  placard, poster, billboard or other thing which is designated, intended or used to advertise or  inform.   ʺTraveled wayʺ means that portion of the roadway used for the movement of vehicles,  exclusive of shoulders and auxiliary lanes.     Sec. 12.16.030. ‐ Standards.     All sThe following standards apply to signs adjacent to freeways shall be :subject to the  standards set  forth in Chapter 10 of the City’s Unified Development Code, the Texas Highway  Beautification Act, and any rules adopted by the State in furtherance thereof.  A.  Signs shall not imitate or resemble any official traffic sign, signal or device.   B.  Signs shall not be erected or maintained upon trees or painted or drawn upon rocks or  other natural features.   C.  No sign shall exceed 1,200 square feet in area.   D.  No sign shall exceed 25 feet in height.   Page 64 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 2 of 4 City Code Chapter 12.16  Deleted language is strikethrough   E.  No sign shall exceed 60 feet in length.   F.  All dimensions include border and trim, but exclude supports.   G.  Double faced, back‐to‐back, or V‐type signs shall be considered as one sign.   H.  Signs which exceed 350 square feet in area may not be double faced (stacked or side  by side.)   I.  Signs may not be located in such a manner as to obscure or otherwise interfere with the  effectiveness of an official traffic sign, signal or device, or to obstruct or interfere with  the driverʹs view of approaching, merging or intersecting traffic.   J.  Signs may not be located within 500 feet of any public park, public forest, public  playground or scenic area so designated by a governmental agency, which is adjacent  to the highway.   K.  Signs may not be erected closer than 100 feet apart on the same side of the highway.   L.  Adjacent to freeways, signs may not be erected closer than 500 feet apart on the same  side of the freeway.   M.  Signs may be located closer than the spacing requirements established in this chapter;  provided, such signs are separated by buildings, natural surroundings or other  obstructions so that only one sign located within the specified spacing is visible at any  one time.   N.  Signs which contain, include or are illuminated by any flashing, intermittent or  moving light or lights are prohibited, except those giving public service information  such as time, date, temperature, weather or similar information.   O.  Lights which are not effectively shielded as to prevent beams or rays of light from  being directed at any portion of the traveled ways of the highways, and which are of  such intensity or brilliance as to cause glare or to impair the vision of the driver of any  motor vehicle, or which otherwise interfere with any driverʹs operation of a motor  vehicle, are prohibited.   P.  No sign shall be so illuminated that it interferes with the effectiveness of or obscures  an official traffic sign, device or signal.     Sec. 12.16.040. ‐ Applicability.     A.  Off‐premise commercial Ssigns shall not be located outside of the business and  industrial zoning districts of the City. Every sign erected within the City, and within 660 feet of  the nearest edge of the right‐of‐way of I‐35 without the owner of the sign first obtaining a  license issued by the State pursuant to the provisions of the Texas Highway Beautification Act,  authorizing the maintenance of said sign. and U.S. 81 shall comply with the standards  established by this chapter, with the following exceptions:   A.  Official signs.   B.  On‐premise signs.   C.  Signs which are not visible from any point on the main‐traveled way viewed from a  height of not more than six feet above any such point.      B.  Off‐premise commercial signs are not permitted adjacent to and visible from SH‐130.  Page 65 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 3 of 4 City Code Chapter 12.16  Deleted language is strikethrough     Sec. 12.16.050. ‐ Existing signs.     A.  Every owner of every sign existing on January 24, 1973, which lies within the Citycity, and  within 660 feet of the nearest edge of the right‐of‐way of I‐35 and U.S. 81, with the  exception of official signs and on‐premise signs, shall have applied for and obtained a  license issued by the Statestate department of highways and public transportation  pursuant to the provisions of the Texas Highway Beautification Act, authorizing the  maintenance of said sign after December 31, 1972.     B.  Every owner of every sign existing on __________, which lies within the City’s  Extraterritorial Jurisdiction, and within 660 feet of the nearest edge of the right‐of‐way of I‐ 35, with the exception of official signs and on‐premise signs, shall have applied for and  obtained a license issued by the State pursuant to the provisions of the Texas Highway  Beautification Act, as amended, authorizing the maintenance of said sign after  _____________________.     Sec. 12.16.060. ‐ Compliance with other regulations.     Every sign regulated by this chapter shall also comply with the zoning ordinances, building  codes and all other applicable codes and ordinances of the City.     Sec. 12.16.070. ‐ Licenses, permits and fees Penalty.   The Building Official shall issue building permits for signs regulated by this article only to  persons who hold valid licenses issued by the state Department of Highways and Public  Transportation pursuant to the provisions of the Texas Highway Beautification Act. The  minimum fee for said building permits shall be $10.00.     A. It is unlawful for a person to erect a sign subject to this chapter without a valid license  issued by the State and a valid construction permit issued by the State.  Any person who  violates a provision of this chapter or a rule adopted by the State under Chapter 391 of the  Texas Transportation Code commits a misdemeanor, and upon conviction thereof shall be  fined not less than $500.00 and not more than $1,000.00 per offense. Each day a violation  occurs shall be considered a separate offense. (See also Section 1.08.010 of this code.)     B. A commercial sign that is erected or maintained in violation of this chapter or state law  endangers the health, safety, welfare, morals, and enjoyment of the traveling public and the  protection of the public investment in the interstate and primary highway systems; is a  public nuisance; and is subject to an injunctive action by the State to prohibit the owner  from maintaining the sign and to require the removal of the sign.    C. In addition to being subject to a criminal penalty or injunctive action, a person who erects a  signs subject to Section 12.16.040.B. is liable to the state for a civil penalty of not less than  Page 66 of 223 Sign Regulations  *** DRAFT ***  UDC Amendment No.18 – Phase 1 Printed on Aug. 28, 20    Added language is underlined Page 4 of 4 City Code Chapter 12.16  Deleted language is strikethrough   $500 or more than $1,000 for each violation, depending on the seriousness of the violation.   A separate penalty may be imposed for each day a continuing violation occurs.    Page 67 of 223 City of Georgetown, Texas City Council Workshop September 8, 2020 S UBJEC T: P resentation and discussion regarding the Transportatio n Impact Fee study including basics o f impact fees, land use assumptions, preliminary Capital Improveme nt P lan (C IP ), and stakeholder engage ment plan -- Wesley Wright, P E, Systems Engineering Director I T E M S UMMARY: Today's presentation is focused on the land use assumptions and capital improveme nt proje c ts that will be use d to de velop the financial analysis o f a po tential Transportation Impact Fee. Attached to this item are the following: Initial P o wer P oint (2 019) which has details about basics and calculations for a Transpo rtation Impact Fee. 9.8.202 0 Transportation Impact Fee P rese ntation Attachment A – Co sting Methodology – Roadways Attachment B – Service Area A - Map Attachment C – Service Area A - P roject List F I NANC I AL IMPAC T: No direct cost. The financial components on Transpo rtation Impact Fees will be disc ussed in detail on a future Counc il Workshop or Re gular Agenda. S UBMI T T ED BY: Wesley Wright AT TAC HMENT S : Description 2020 Impac t F ee P res entation Attac hment A - C os ting Metho d o lo gy - R oadways Attac hment B - S ervic e Area A - Map Attac hment C - S ervice Area A - P ro ject Lis t 2019.11.26 T I F P res entatio n Page 68 of 223 1 Transportation Impact Fees Study Update: Stakeholder Engagement Plan, 101, & Study Assumptions September 8, 2020 Page 69 of 223 22 Presentation Overview •Recap of Study History •Transportation Impact Fee Basics •Process Overview •Study Assumptions •Land Use Assumptions (LUA or “Growth”) •Capital Improvements Plan (TIF eligible) •Stakeholder Engagement Plan •Feedback and Discussion Page 70 of 223 33 Recap of Study History •Council briefing on Transportation Impact Fees 101 –November 26, 2019 •1st Phase Draft Report –March 2020 •Includes Growth Assumptions and Impact Fee eligible CIP projects •Went on Hold due to COVID-19 •Re-started August 2020 Page 71 of 223 44 Impact Fee Basics •What are they? •Mechanism to recover infrastructure costs required to serve future development •Governed by Chapter 395 of the Texas Local Government Code; Established in Texas in 1987 •Water, Wastewater, Roadway, and Drainage impact fees allowed in Texas •Other states may have school district, police, fire, parks, and/or library impact fees •Other municipalities adopted include: •Round Rock, New Braunfels, dozens in DFW area •Other municipalities considering: •Austin, Pflugerville Page 72 of 223 55 Data Collection Service Areas Land Use and CIP Public Hearing Max Impact Fee Report Rate Scenarios Ordinance Writing Public Hearing Collect (Grace Period) Process Process •Requires two public hearings 1.LUA and CIP 2.Report/Ordinance/Policy •IFAC provides written comments on these Page 73 of 223 66 Service AreasDiscussed at November 26, 2019 Council Meeting –no comments Page 74 of 223 77 Impact Fee: Capital Improvements Plan* •Components that can be paid for through an impact fee program: Construction cost of capital improvements on the CIP Roadway to thoroughfare standard Traffic signals, bridges, sidewalks, etc. Survey and Engineering fees Land acquisition costs, including court awards Debt Service of impact fee CIP Study/Update Costs •Components that cannot be paid for through an impact fee program: 6 Projects not included in the CIP 6 Repair, operation and maintenance of existing or new facilities 6 Upgrades to serve existing development 6 Administrative costs of operating the program *Impact Fee CIP is different from annual CIP City preparesPage 75 of 223 88 Impact Fee Components: Land Use Assumptions •Consistent with recently updated Comprehensive Plan •Establishes Infrastructure Demands and Master Plans •Population and Employment Projections •Aggressive vs. Non-aggressive Growth Rates •Calibrated with historical growth •Coordinate with Future Land Use Page 76 of 223 99 Land Use Assumptions (City Limits) •Projecting 15,506 residential units of growth 2020-2030 •Includes single family and multifamily –about 1,320 units per year of single family and 330 units per year (1 complex) multifamily Service Area Year Residential (Units) Employment (Sq. Ft.) Single Family Multi- Family Basic Service Retail Total A 2020- 2030 2,720 680 180,000 800,000 710,000 1,690,000 B 838 209 64,800 510,000 510,000 1,084,800 C 1,080 270 108,000 648,000 396,000 1,152,000 D 1,502 376 21,600 310,000 350,000 681,600 E 1,090 273 -430,000 430,000 860,000 F 2,094 524 25,200 576,000 360,000 961,200 SC 3,880 970 -324,000 360,000 684,000 Total 13,205 3,301 400,000 3,600,000 3,120,000 7,113,600 Page 77 of 223 1010 Types of Projects -Roadways •Previously Constructed –Identified corridors that were previously constructed and have excess capacity for future development to utilize. •Widening –Existing roadways not currently built to the ultimate class in the Transportation Master Plan and must be completely reconstructed. •Access Management –Existing undivided roadways identified for median construction in the existing center turn lane for access management purposes. •New -All future roadways needed to complete the Transportation Master Plan. Page 78 of 223 1111 Types of Projects -Intersections •Signal –either a new signal or modification to an existing signal •Roundabout –a new roundabout intersection •Turn Lane –addition or extension of a turn lane •Overpass –identified new grade separated crossings in TMP •Innovative –construction of an intersection improvement to be determined after complete analysis including special high capacity intersections •Other (ITS System Upgrades) –identified by staff and was split evenly between the nine (9) service areas Page 79 of 223 1212 LUA & CIP Summary •Total growth is highest in Service Area A •Lowest growth in Service Area B (more built-out) •Impact Fee CIP Total Cost -$602 Million •Includes OTP projects and some past projects with debt service still being paid off •Draft report attached as backup for review prior to public hearing to make a motion on study assumptions (LUA, CIP chapters only –full report later) Highest growth Lowest growth Page 80 of 223 1313 Three key strategies are: The plan will…. •Ensure that inclusive and efficient consultation is undertaken throughout the process; and •Identify how the project team will respond to community input and keep them informed of decisions The benefits are…. •Commits the City to being open, accessible, and accountable •Assists the City to inform and listen to community members •Allows a broader range of views to be heard and the City to inform the public how input is affecting decisions •Encourages collaboration in the best interest of the community and to achieve balanced decisions Inform Consult Involve Stakeholder Engagement Plan Page 81 of 223 1414 Inform Information dissemination is the primary form of community engagement. In order to be able to actively engage in the community and in Georgetown’s decision- making process, the community requires information to understand purpose, use, and calculation of fee. Goal: Information To provide the community with appropriate and timely information regarding the development of a transportation impact fee. Specific information related to purpose, calculation methodology, etc…. Consult Consultation takes place when feedback is required or requested. As it relates to the development of a transportation impact fee, this will include the development of land use assumptions and preliminary CIP, and calculation of maximum fee. Goal: Input To capture community input on the how Georgetown should use a transportation impact fees to cover costs related to a growing transportation network along with existing funding sources (taxes, grants, and etc…). Involve Community involvement enables the community to provide ongoing and in-depth input into the development of a transportation impact fee that are best able to address the community’s needs. Goal: Feedback Loop To work on an ongoing basis with the community to ensure their ideas, concerns and suggestions are heard and they understand how their input is considered in the development of a transportation impact fee. Stakeholder Engagement Plan Page 82 of 223 1515 Inform Consult Involve Event Date Council Nov 2019 IFAC #1 Mar 2020 COVID HOLD Developer Breakfast #1 Sept 2020 Chamber Dev Alliance #1 Sept 2020 IFAC #2 Sept 2020 Event Date Developer Breakfast #2 Oct 2020 Chamber Dev Alliance #2 Oct 2020 IFAC #3 Oct 2020 Public Hearing Oct 2020 IFAC #4 Nov 2020 Developer Breakfast #3 Nov 2020 Chamber Dev Alliance #3 Nov 2020 IFAC #5 Dec 2020 Event Date IFAC #5/6 Dec/ Jan Chamber Dev Alliance #4 Dec 2020 Developer Breakfast #4 Dec 2020 IFAC #7 Jan 2021 IFAC Present to Council Feb 2021 Public Hearing Feb 2021 Council Mar 2021 Stakeholders: •Council •Home Builders •Impact Fee Advisory Committee (IFAC)•Businesses •Chamber of Commerce •General Public Page 83 of 223 1616 What’s Next? •Any initial feedback on LUA and/or CIP and Engagement? •During Regular Session today –Item to set a Public Hearing for October 27th on Study Assumptions (LUA & CIP components of Study) •October 27th –Public Hearing on LUA & CIP •(Now –December): Stakeholder Engagement •January –return to set Public Hearing on Adopting Study •(January –Complete): Ordinance drafting with collection rate & policy (IFAC will submit comments on Study & recommendation) Page 84 of 223 Costing Methodology – Roadways • Planning level cost projections – may differ during design • Does NOT include right- of-way acquisition • Does NOT include new utilities, relocation, or upsizing • Only the City ’s anticipated contribution $ amount is included in Impact Fee Construction Pay Items Project Information Construction Summary of Costs and Page 85 of 223 Service Area A Map Page 86 of 223 Service Area A Project List Page 87 of 223 Transportation Funding Impact Fees 101 Policies to Deal with Growth November 26, 2019 Page 88 of 223 2 Rough Outline • Funding Needs • Growth • Why are these topic important for growing communities? • Theoretical Scenarios • Impact Fee Components • Feedback and Discussion Page 89 of 223 3 Transportation Funding • What are the funding needs? • Existing Need • Maintenance • Operations • Complete Reconstruction (Capital) • Growth Needs • Capital Page 90 of 223 4 Transportation Funding Page 91 of 223 5 Funding Options • Property Taxes • Bonds (GO/CO) • Transportation Utility Fee • TIRZ (Tax Increment Reinvestment Zone) • TRZ (Transportation Reinvestment Zone) • Developer Agreements (380 Agreement) • PID (Public Improvement District) • MUD (Municipal Utility District) • Traffic Impact Analysis (TIAs) •Impact Fee / Rough Proportionality RED = GROWTH RELATED BLACK = EXISTING Page 92 of 223 6 Transportation Funding • Why is this important for growth? • Infrastructure costs greatly exceed traditional tax and fee collection rates in fast-growing cities • New York City Example: 1% vs. 10% Growth • Federal / State funding no longer keeps up with need • Funding mechanisms for infrastructure (especially transportation) are limited in Texas • ‘Growth should pay for Growth’ is logical & reasonable Page 93 of 223 7 Theoretical Scenarios 4 Lane Divided (ultim ate) 2 3 4 6 1 Proposed 4 Lane Section5 2 Lane Asphalt (Ultimate 6 Lane section) 1,200’ 2,000’1,300’300’ 1,700’ 3,500’ 250 Homes 50,000 ft2 Retail 250 Homes 50,000 ft2 Retail 50 Homes 50 Homes 100 Homes 550 Homes 75,000 ft2 Retail Page 94 of 223 8 Current Practice • Traffic Impact Analysis – when a development is anticipated to generate more than 2,000 daily trips, a study is done to determine cost-share of improvements • Imperfect – “last person in” takes greater share • Takes time - typically 3-6 months to complete • No formal update process • Funds are constrained • Developer uncertainty in process • Received $2.6 Million last 20 years from TIAs Page 95 of 223 9 City Policy Decisions • Is there a better way to do this? • We need a system that is: •Predictable ; for the development community and City •Equitable; equal development should pay an equal fee •Transparent •Flexible ; funds collected need to be used to add capacity to the system, not sit in a bank or in a location where they aren’t needed •Legal; compliant with proportionality rules (Ch. 212 LGC) •Consistent with the City’s overall goals and objectives for growth – perhaps even encourage development where infrastructure already exists Page 96 of 223 10 Impact Fee Basics • What are they? • Mechanism to recover infrastructure costs required to serve future development • Governed by Chapter 395 of the Texas Local Government Code; Established in Texas in 1987 • Water, Wastewater, Roadway, and Drainage impact fees allowed in Texas • Other states may have school district, police, fire, parks, and/or library impact fees • Other municipalities adopted include: • Round Rock, New Braunfels • Other municipalities considering: • Austin, Buda Page 97 of 223 11 Impact Fee Components • Service Areas* • Land Use Assumptions • Service Units • Capital Improvements Plan • Maximum Fee Calculation • Initial Collection Rate • Policy Kimley-Horn Study Ordinance / Policy Decision (Always adjustable) *Draft Complete – Input Today’s Meeting Page 98 of 223 12 Impact Fee Components: Service Areas • Funds collected within a service area must be spent on projects within the same service area within 10 years • Water, Sewer (Service Area: Citywide) • Transportation - 6 mile trip length limit •Limited to Corporate Limits for roadways; Cannot include ETJ (TIA likely to remain in ETJ) • Fort Worth = 27 Areas; Fate = 1 Area • Georgetown – 9 Areas (3 may have $0 max fee) Page 99 of 223 13 Service Areas Page 100 of 223 14 Impact Fee Components: Land Use Assumptions •Will be consistent with Comp Plan • Establishes Infrastructure Demands and Master Plans • Population and Employment Projections • Aggressive vs. Non-aggressive Growth Rates • Calibrated with historical growth • Coordinate with Future Land Use Page 101 of 223 15 Impact Fee Components: Service Unit • Roadway utilizes vehicle miles - One vehicle to travel one mile • Based off of local travel lengths and ITE Trip Generation (covers wide array of land uses) • Water utilizes meter size, fixed route system Page 102 of 223 16 Impact Fee: Capital Improvements Plan* •Components that can be paid for through an impact fee program: ü Construction cost of capital improvements on the CIP §Roadway to thoroughfare standard §Traffic signals, bridges, sidewalks, etc. ü Survey and Engineering fees ü Land acquisition costs, including court awards ü Debt Service of impact fee CIP ü Study/Update Costs • Components that cannot be paid for through an impact fee program: 6 Projects not included in the CIP 6 Repair, operation and maintenance of existing or new facilities 6 Upgrades to serve existing development 6 Administrative costs of operating the program *Impact Fee CIP is different from annual CIP City prepares Page 103 of 223 17 Impact Fee Components: Maximum Fee • New Service Units are derived from Land Use Assumptions (10-Year Growth) and Future Land Use Plan • Impact Fee Capital Improvements Plan based on the portion of the Master Thoroughfare Plan needed for future growth • Credits against impact fees due when a developer constructs or contributes to a thoroughfare facility • Dedication of Right-of-Way is not included in this •Impact Fee calculations must be updated at least every 5 years miles)-(vehicle UnitsServiceNew ($)CIP theofCosteRecoverabl UnitServicePerFeeImpactMax.= Page 104 of 223 18 Impact Fee Components: Collection Rate Page 105 of 223 19 Schedule Item Date Study Commissioned Winter 2019 80% Draft CIP Summer 2019 Impact Fee 101 Today Stakeholder Engagement Fall/Winter 2020 Public Hearing #1 – Study Assumptions Winter 2020 Public Hearing #2 – Ordinance Consideration Spring 2020 Page 106 of 223 20 Schedule – Stakeholder Engagement Item Date Stakeholder Meeting on Impact Fees 101 (min. 2) Winter 2019 / Spring 2020 P&Z Meeting Presentations Fall/Winter 2020 GTAB / IFAC Monthly Meetings Winter 2019 / Spring 2020 Public Hearing #1 – Study Assumptions Winter 2020 Public Hearing #2 – Ordinance Consideration Spring 2020 Page 107 of 223 21 What’s Next? • Action 1: Impact Fee Advisory Committee (IFAC) – Establish Committee • Chapter 395.058 provides the CIAC role and makeup (40% Development Community) • Current plan: GTAB plus some development community members • Item at December 10, 2019 Council meeting • Action 2: Comment on Service Areas Map Page 108 of 223 22 Service Areas Page 109 of 223 City of Georgetown, Texas City Council Workshop September 8, 2020 S UBJEC T: P resentation and discussion regarding the mobility bo nd program targe ting the M ay 2021 election -- Bridget Hinze Weber, Assistant to the City M anager and Ray Mille r, Director of P ublic Works I T E M S UMMARY: Staff will provide an update o n the Mobility Georgetown Bond P rogram targeting the May 20 21 election, including: the progress of the c itizen committee, public engage ment, status o f partner projects, and tax rate capacity. F I NANC I AL IMPAC T: N/A S UBMI T T ED BY: Bridget Hinze Weber, Assistant to the City Manage r AT TAC HMENT S : Description Mo b ility G eorgetown Up d ate - 09.08.2020 P res entatio n Engagement R ep o rt Page 110 of 223 MOBILITY GEORGETOWN MAY 2021 BOND ELECTION CITY COUNCIL WORKSHOP: SEPTEMBER 8, 2020 Page 111 of 223 PRESENTATION OVERVIEW •Background •Citizen Committee Progress •Public Engagement •Status of Projects •Tax Rate Capacity •Direction needed: length of bond and range of proposed bond amount Page 112 of 223 BACKGROUND May 2020 Council Workshop: Council directed staff to implement a bond program targeting the May 2021 election July 14 Council Meeting: Council approved the membership of the Mobility Georgetown Citizen Advisory Committee Page 113 of 223 CITIZEN COMMITTEE August 24: First meeting of the Mobility Georgetown Citizen Advisory Committee September –October : Ranking/prioritization and initial recommendations developed November: 2nd round of public engagement activities to receive feedback about the proposed bond projects December: Committee develops final recommendations January: Project recommendations presented to Council Page 114 of 223 PUBLIC ENGAGEMENT SUMMARY Public engagement will be at the center of Georgetown’s bond process and staff will develop a way for every stakeholder —from the public to City Council to partner agencies —to engage in the process and provide feedback on categories of importance. Public engagement: before election is called 1st Phase: July 15 –August 15 2nd Phase: November Public education: after election is called in February 2021 City Website: https://bonds.georgetown.org/ Project website: https://engagekh.com/georgetownmobilitybond/home Page 115 of 223 PUBLIC ENGAGEMENT: CITIZEN SURVEY •July 15 –August 15: online survey •The opportunity to provide feedback was shared dozens of ways, in English and Spanish, from social media posts and targeted emails to nearly $4,000 spent in advertising in newspapers, on the radio, and on Facebook. •Full public engagement report provided as attachment. Page 116 of 223 PUBLIC ENGAGEMENT: CITIZEN SURVEY Most respondents want projects to focus on investing in roads and intersections, managing congestion, and improving traffic signals. Page 117 of 223 PUBLIC ENGAGEMENT: CITIZEN SURVEY Page 118 of 223 PUBLIC ENGAGEMENT: CITIZEN SURVEY Page 119 of 223 PUBLIC ENGAGEMENT: CITIZEN SURVEY Page 120 of 223 PUBLIC ENGAGEMENT NEXT STEPS •November: public engagement seeking feedback on committee’s selection of projects •Public Education: Once the projects, bond amount and ballot items are approved by Council, the City will conduct a campaign to educate and inform residents about the bond program and projects. Page 121 of 223 STATUS OF PROJECTS Page 122 of 223 LEANDER ROAD EXPANSION •Project limits: Norwood to SW Bypass •Partnership between the City and CAMPO/TxDOT •City of Georgetown to complete design and acquire ROW: $3.5MM •CAMPO/TxDOT to fund construction: $5.3MM •CAMPO/TxDOT pulled their funding commitment for this project (and many others in the Austin District) to support IH-35 project through Austin: •$3.4 billion project for IH-35 from SH-45N to SH-45S Page 123 of 223 LEANDER ROAD EXPANSION Page 124 of 223 LEANDER ROAD EXPANSION: DIRECTION NEEDED Options: •Finish design and ROW acquisition and get the project shovel ready, without construction funding •Continue to hold at 30% until construction funding is secured •Discuss potential construction funding as part of the upcoming 2021 Mobility Election •Consider the sidewalk/bike path as an independent, standalone project also as part of the 2021 Mobility Election Staff Recommendation: •Complete 30% schematic plans, acquire ROW, and redirect balance of project funds to other eligible projects Page 125 of 223 IH-35 AND HWY 29 •TxDOT Austin District preparing schematic and environmental documentation for the I-35 at SH 29 (from Wolf Ranch Pkwy to HEB) project •TxDOT requesting City of Georgetown participation and an Advance Funding Agreement •Staff to meet with TxDOT representatives in September on options and costs in order to provide timely feedback to the Mobility Georgetown Citizen Advisory Committee •Virtual Open House: September 17 –October 2 Page 126 of 223 WILLIAMSON COUNTY PARTNERSHIPS 1 2 3 4 5 Page 127 of 223 WILLIAMSON COUNTY PARTNERSHIPS 1.SW By-Pass Extension:will provide the connection to SH-29 on the west side of IH-35.This project was included in the Wilco 2019 Bond Program which the City supported and agreed to participate in.Williamson County is designing and will oversee construction of the project. Estimated Cost and Potential City of Georgetown participation City Funds the Design = $1,000,000 City Towards Construction = $1,000,000 Request to Wilco = $3,473,000 Total Project Cost = $5,473,000 City Share 37%County Share 63% Page 128 of 223 WILLIAMSON COUNTY PARTNERSHIPS 2.SW By-Pass from IH-35 to Leander Road.This project has been completed and was constructed through the Texas Crushed Stone Quarry by Williamson County.This section of the SW By-Pass was opened on May 26th. 3.This section (SE Inner Loop)from IH-35 to FM 1460 is planned for reconstruction to create a 5-lane section.This will be designed and constructed by the City of Georgetown. Page 129 of 223 WILLIAMSON COUNTY PARTNERSHIPS 4.East extension of the SW By-Pass from the existing terminus of Sam Houston east to SH-29:being designed and constructed by Williamson County has part of the Wilco 2019 Bond Program.The City supported and agreed to participate in. Estimated Cost and Potential Georgetown Participation City funds ROW and utilities = $1,200,000 * City towards construction = $2,800,000 * Request to Wilco = $18,737,000 Total Project Cost = $22,537,000 City Share 18%County Share 82% *Potential funding from future bond proceeds and possible land dedication from the City of Georgetown Page 130 of 223 WILLIAMSON COUNTY PARTNERSHIPS 5.Westinghouse (CR 111 /CR 105 )from FM 1460 to SH-130 :the City supported and agreed to participate.Williamson County is designing and will oversee construction of the project. Estimated Cost and Potential Georgetown Participation City Funds ROW and Utilities = $2,400,000 * City Towards construction = $5,800,000 * Request to Wilco = $11,996,000 Total Project Cost = $20,196,000 City Share 40%County Share 60% *Potential funding from future bond proceeds Page 131 of 223 TAX RATE CAPACITY Page 132 of 223 TAX RATE COMPACITY 5 Year Capital Improvement Project (CIP) Planning Process: •Look at debt retirement schedule and assumed average annual growth rate •Allows for approximately $18 million annually in debt over the next 5 years •Current 5 Year CIP includes transportation, public safety, fleet, and parks projects •Could be redirected to support future bond efforts Page 133 of 223 TAX RATE COMPACITY Debt Modeling for proposed Mobility Georgetown 2021 Bond: •Modeling is on top of existing CIP plan •Growth between 3 –7 percent assumed average annual growth rate •Tax rate increase between 2 –5 cents •5-year program vs.10-year program •Staff recommends a 5-year bond program based on the challenge of identifying the top mobility priorities past a 5-year outlook. Page 134 of 223 5-YEAR BOND PROGRAM Page 135 of 223 10 -BOND PROGRAM Page 136 of 223 DIRECTION REQUESTED Direction needed from Council to Citizen Advisory Committee: •Length of bond •5 years vs. 10 years •Range of proposed bond amount •Balancing property tax commitments with project needs Page 137 of 223 Page 138 of 223 Page 139 of 223 Page 140 of 223 Page 141 of 223 Page 142 of 223 Page 143 of 223 Page 144 of 223 Page 145 of 223 Page 146 of 223 City of Georgetown, Texas City Council Workshop September 8, 2020 S UBJEC T: P resentation and discussion regarding the propo sed changes to the Fisc al and Budgetary P olicies as part o f the F Y2 02 1 budget developme nt pro cess -- Leigh Wallace, Financ e Director I T E M S UMMARY: The purpose of this item is to present the proposed changes to the Fiscal and Budge tary P o licy for the upcoming budge t. The purpose of the Fisc al and Budgetary P olicy is to provide the framework for financial operations of the City and to ensure prudent stewardship, financial planning and accountability. The bond rating agencies and external auditors are the primary external parties that review the policies and co mpliance. Each year the P olicy is administratively amended to reco gnize date and amount changes within the text; and to addre ss any new financial o r regulatory requirement that may ne e d to be added. Other amendments may be recommended to c larify wording or to furthe r define a particular policy are a. P otential changes for co nsideration and discussio n are no ted in the overview prese ntation. The full version of the policie s with tracked changes is provided, as well as a clean c opy. These changes were reco mmended by the General Government and Finance Advisory Bo ard at their August 26, 2 02 0 meeting. Adoption of the po licies will be an item on the Septe mber 2 2, 2020 Council meeting. F I NANC I AL IMPAC T: N/A S UBMI T T ED BY: Danella Elliott AT TAC HMENT S : Description O verview P res entatio n P roposed F is c al P olic ies - Tracked C hanges P roposed F is c al P olic ies - C lean copy Page 147 of 223 FY2021 Annual Budget Fiscal and Budgetary Policies Update for FY2021 Council September 8, 2020 Page 148 of 223 FY2021 Annual Budget Purpose •Fiscal and budgetary policies guide: –Budget development and monitoring process •Revenue and Expense –Capital asset replacement –Debt philosophy and process –Reserves and Financial Ratios –Accounting and audit procedures •Goal: Find a balance between flexible and firm Page 149 of 223 FY2021 Annual Budget Audience •Reviewed annually by GGAF and Council as part of budget development process •Internal staff •External auditors •Credit rating agencies Page 150 of 223 FY2021 Annual Budget Administrative Changes •Clarify existing wording and formatting •Remove old language that no longer applies •Update compliance for coming fiscal year Page 151 of 223 FY2021 Annual Budget Substantive Changes •Changing the meaning of the policy –Calculation change –Definition change –Change in decision maker •Adding new policies Page 152 of 223 FY2021 Annual Budget Examples of Past Updates •Add new reserves •Update policy to align with opportunities in new software system •Clarify goals for rate-setting and revenue recovery •Define appropriate uses of one-time savings Page 153 of 223 FY2021 Annual Budget Pandemic Context Section IX. Budget Contingency Plan •FY2020 use of Budget Contingency Plan for first time in several years, and under new emergency circumstances •Broaden the wording in the plan to accommodate a wider variety of circumstances •Leave intact the actions authorized by City Manager and the Council •Tighten up replenishment guidance when reserves are used Page 154 of 223 FY2021 Annual Budget Pandemic Context Cont’d Section XI. Capital Maintenance and Replacement •Economic changes resulting in decreased revenues •FY2021 budget uses various reserves to sustain services/projects •Reviewed with Council during budget development Page 155 of 223 FY2021 Annual Budget Pandemic Context Cont’d Section XIV. Debt Management •Collapse of the municipal debt market in March and April 2020 led City to postpone annual debt sale for capital projects •Financial Advisor recommended various options •Broaden wording for method of sale to include options other than competitive bidding •Keep wording alternatives must be approved by Council Page 156 of 223 FY2021 Annual Budget Re -organization Section X. Capital Improvement Program •Georgetown Utility Systems Board re-organized to two separate boards to specialize in Electric Utility and Water Utility affairs •Each board will review rates, contracts, and capital infrastructure plans Page 157 of 223 FY2021 Annual Budget Updates to Reserves Section XV. Financial Conditions and Reserves •Add GTEC and GEDCO reserves consistent with bylaws and existing practice •Remove Downtown TIRZ debt service reserve no longer needed since Garage debt repurposed to Waste Transfer Station •Add Cemetery reserve consistent with existing practice Page 158 of 223 FY2021 Annual Budget Special Purpose Funding Section V. Expenditure Management Special Purpose Funding –In order to support community assistance programs, the City designates specific funding for special purposes, including Social Services, Children’s Programs, and Public Art. The City reserves the ability to cap this special purpose funding when necessitated by budget contingency or compliance issues, such as revenue shortfalls, or other reasons as determined by City Council. Strategic Partnerships for Community Services –The City of Georgetown values partnerships with organizations that are committed to addressing our communities’ greatest public challenges and has identified key priorities in the following areas: a.Public Safety b.Transportation c.Housing d.Parks & Recreation e.Veteran Services f.Safety Net The City has targeted funding for these programs to be $5.00 per capita, which may be adjusted to offset the effects of general inflation based upon Consumer Price Index. If previous funding levels are higher than the targeted amount, and to avoid significant reductions in levels of funding, the City Council shall seek to attain this target chiefly through population growth. These funds will be allocated and paid according to the City Council’s guidelines for such programs. Page 159 of 223 FY2021 Annual Budget Special Purpose Funding Cont’d Historical spending Special Purpose Funding Allocations including SPCS Grants, and In- Kind Utility & Maintenance Assistance Population Total Dollars Per Capita for Special Purpose Funding Targeted Dollars Per Capita for SPCS Grants FY10 407,943 48,164 10.03$ $5.00 FY11 431,649 48,902 8.83$ $5.00 FY12 432,561 49,543 8.73$ $5.00 FY13 434,938 50,542 8.61$ $5.00 FY14 423,466 50,848 8.33$ $5.00 FY15 433,564 54,689 7.93$ $5.00 FY16 431,557 58,085 7.43$ $5.00 FY17 433,780 61,119 7.10$ $5.00 FY18 434,377 62,573 6.94$ $5.00 FY19 434,588 64,950 6.69$ $5.00 FY 20 436,105 66,240 6.58$ $5.00 Proposed FY 21 434,588 71,581 6.07$ $5.00 Page 160 of 223 FY2021 Annual Budget Special Purpose Spending Detail •Strategic Partnerships $400,049 •Utility Assistance $ 25,256 –Madella Hilliard and Mary Bailey •Maintenance $ 9,283 –Madella Hilliard •Total FY2021 $434,588 Page 161 of 223 FY2021 Annual Budget Summary •Several additions/clarifications to the policies for FY2021 reflecting current practices –Opportunity to see policies in new light of pandemic circumstances –Use of reserves as planned during difficult economic environment and uncertainty •City continues to be recognized by credit rating agencies for strong fiscal policies that emphasize flexible liquidity Page 162 of 223 FY2021 Annual Budget Next Steps Receive Council feedback Adopt policies with budget September 22 Page 163 of 223 FY20201 Annual Budget Fiscal and Budgetary Policy Adopted: September 224, 202019 I. PURPOSE The City of Georgetown is committed to financial management through integrity, prudent stewardship, planning, accountability, transparency and communication. The broad purpose of the Fiscal and Budgetary Policies is to enable the City and its related component units, including the Georgetown Transportation Enhancement Corporation (GTEC) and the Georgetown Economic Development Corporation (GEDCO), to achieve and maintain a long-term stable and positive financial condition, and provide guidelines for the day-to-day planning and operations of the City’s financial affairs. Policy scope generally spans areas of accounting, operational and capital budgeting, revenue and expenditure management, financial reporting, internal controls, investment and asset management, debt management and forecasting. This is done in order to: A. Demonstrate to the residents of Georgetown, the investment community, and the bond rating agencies that the City is committed to a strong fiscal operation; B. Provide precedents for future policy-makers and financial managers on common financial goals and strategies; C. Fairly present and fully disclose the financial position of the City in conformity to generally accepted accounting principles (GAAP); and D. Demonstrate compliance with finance-related legal and contractual issues in accordance with the Texas Local Government Code and other legal mandates. These policies will be reviewed and updated annually as part of the budget preparation process. II. FUND STRUCTURE AND BASIS OF BUDGETING The budgeted funds for the City of Georgetown include: Governmental Funds: General Fund which accounts for all financial resources except those required to be accounted for in another fund, and include basic governmental services, such as Street Maintenance, Planning and Development, Police, Fire, Parks, as well as Solid Waste Management. Special Revenue Funds (SRF) account for specific revenues that are legally restricted for specified purposes. Examples include Tourism, Parkland Dedication, Library Donations, Animal Services Donations, and Street Maintenance Sales Tax. Debt Service Fund is used to account for the payment of general long-term debt principal and interest. Page 164 of 223 FY20201 Annual Budget Capital Project Funds are used to account for the acquisition or construction of major capital facilities other than those financed by enterprise activities. Proprietary Funds: Internal Service Funds account for goods or services provided by one internal department to another. The City uses this system to recognize cost for fleet replacement and maintenance, facility maintenance, computer replacement and maintenance and employee health insurance costs. Enterprise Funds include the City’s business like activities including all the utility funds and the airport. Basis of Accounting and Basis of Budgeting The City accounts and budgets for all Governmental Funds using the modified accrual basis of accounting. This basis means that revenue is recognized in the accounting period in which it becomes available and measurable, while expenditures are recognized in the accounting period in which the liabilities are incurred. Because the appropriated budget is used as the basis for control and comparison of budgeted and actual amounts, the basis for preparing the budget is the same as the basis of accounting. Exceptions to the modified accrual basis of accounting include: • Encumbrances, which are treated as expenditures in the year they are encumbered, not when expended • Grants, which are considered revenue when awarded, not received • Principal and interest on long-term debt, which are recognized when paid. Proprietary Funds are accounted and budgeted using the full-accrual basis of accounting. Under this method, revenues are recognized when they are earned and measurable, while expenses are recognized when they are incurred regardless of timing or related cash flows. The basis for preparing the budget is the same as the basis of accounting except for principal payments on long-term debt and capital outlay which are treated as budgeted expenses. Exceptions include: • Depreciation which is not budgeted • Non-budgeted accruals such as compensated absences. III. OPERATING BUDGET Budgeting is an essential element of the financial planning, control and evaluation process of municipal government. The operating budget is the City’s annual financial operating plan. The annual budget includes all of the operating departments of the General Fund, proprietary funds, debt service funds, special revenue funds, and capital improvement funds of the City. A. Form of Government – The Charter (Section 1.03) established a Council-Manager Government wherein the City vests power in the City Council to “enact legislation, adopt budgets, determine policies, and appoint the City Manager who shall execute the laws and administer the government of the City.” B. Comprehensive Plan – The Charter (Section 1.08) requires that the City Council “establish comprehensive planning as a continuous and ongoing governmental function in order to promote and strengthen the existing Page 165 of 223 FY20201 Annual Budget role, processes and powers of the City of Georgetown.” The current comprehensive plan is the 2030 Plan adopted in 2006. C. Preparation – The Charter (Section 6.02) requires “a proposed budget prepared by the City Manager and submitted to the City Council at least thirty days prior to the end of the fiscal year. The budget shall be adopted not later than the twenty-seventh day of the last month of the fiscal year. No budget will be adopted or appropriations made unless the total estimated revenues, income and funds available shall be equal to or in excess of such budget or appropriations, except otherwise provided.” 1. Proposed Budget – A proposed budget shall be prepared by the City Manager with participation of all of the City’s Directors within the provision of the Charter and the 2030 Plan. a. The budget shall include four basic segments for review and evaluation: • Revenue • Personnel Costs • Operations and Maintenance Costs • Capital and other non-project Costs b. The budget review process will include City Council participation in the development of each segment and allow for resident participation in the process, and will allow for sufficient time to address policy and fiscal issues by the City Council. c. A copy of the proposed and approved budgets will be filed with the City Secretary when it is submitted to the City Council and will be available on the City’s website. 2. Adoption – Upon finalization of the budget appropriations, the City Council will hold a public hearing, and subsequently adopt by Ordinance the final budget as amended. The budget will be effective for the fiscal year beginning October 1st. The Annual Budget document will be submitted annually to the Government Finance Officers Association (GFOA) for evaluation and consideration for the Distinguished Budget Presentation Award. D. Balanced Budget – The goal of the City is to adopt and maintain a balanced operating budget using sustainable funding sources that are expected to continue to be available in subsequent fiscal years. Excess balances in operating funds from previous fiscal years shall remain in the fund in which they were appropriated until either such excess balances are proposed and adopted pursuant to Section III. C. Preparation of this policy; until they are used to reduce outstanding debt obligations of the City; or both. The Charter (Section 6.04) requires that an operating deficit created in any fiscal year shall be paid off and discharged during the following year. In practice, deficit has been interpreted to mean City funds as a whole. The City Council may choose from time to time to allow individual funds to have a negative balance as long as Operating Reserve requirements for the City as a whole are maintained. E. Planning – The budget process will be coordinated so that major policy issues are identified prior to the budget approval date. This will allow City Council adequate time for consideration of appropriate decisions and analysis of financial impacts. Page 166 of 223 FY20201 Annual Budget F. Reporting – Summary financial reports will be presented to the City Council quarterly. These reports will be in a format appropriate to enable the City Council to understand the overall budget and financial status. G. Control and Accountability – Each Director, appointed by the City Manager, will be responsible for the administration of his/her departmental budget. This includes accomplishing the Goals and Objectives adopted as part of the budget and monitoring each department budget for revenue collections and compliance with spending limitations. Directors may transfer funds up to $25,000 within the operations and maintenance or capital line items within a departmental budget category with approval from Finance. All transfers from or to the Personnel line items require approval of the Finance Director and City Manager. All other transfers of appropriation or budget amendments require either City Council or City Manager approval as outlined in Section III.G Budget Amendments and Section V.C.4 Use of Excess Salary Savings. H. Budget Amendments – The Charter (Section 6.04) and the Local Government Code 102.009 and 102.010 provide a method to amend the budget for emergency appropriations and municipal purposes. The City Council may authorize, with a majority plus one vote, an amendment to the original budget. This may be done in cases of grave public necessity, or to meet an unusual and unforeseen condition that was not known at the time the budget was adopted. The following criteria will be used in evaluation of budget amendments: • Is the request necessary? • Why was the item not budgeted in the normal budget process? • Why can't a transfer be done within the Division to remedy the condition? The Finance Director must certify availability of revenues or funding sources prior to adoption. If needed, the City will amend the budget at year end for increased revenue and for expenditures that exceeded budgeted amounts. The City may also amend the budget for any capital project timing adjustments from prior year, as well as any other known adjustments needed and approved at that time. I. Contingency Appropriations – The budget may include contingency appropriations within designated operating department budgets. These funds are used to offset expenditures for unexpected maintenance or other unanticipated expenses that might occur during the year. Currently, the City maintains contingency appropriations for items such as insurance deductibles, unexpected legal expenses and equipment repairs. J. Use of Unanticipated and Unappropriated General Fund Balances – Within 90 days after fiscal year end, staff will report the projected General Fund balance to Council. In the event that unexpected, unbudgeted amounts are determined to be available in the General Fund after year end, these funds may be used for any of the following purposes, as approved by the City Council: 1. to fund capital projects; 2. to fund equipment purchases in lieu of issuing debt; 3. to reduce outstanding City debt, including bonded indebtedness and unfunded pension liabilities; 4. to fund contingent liabilities such as the benefit payout reserve, cemetery trust fund, and similar obligations of the City; Page 167 of 223 FY20201 Annual Budget 5. to take other steps to reduce property tax rates or mitigate any future increases; 6. to hold those funds in reserve for future commitments or contingencies that may be pending, and/or; 7. to fund an Economic Stability Reserve of annual General Fund operating expenditures according to Section XV, A, 2, b, Economic Stability Reserve. IV. REVENUE MANAGEMENT A. Characteristics – The City will strive for the following optimum characteristics in its revenue system: 1. Simplicity – The City, where possible and without sacrificing accuracy, will strive to keep the revenue system simple in order to reduce compliance costs for the taxpayer or service recipient. 2. Certainty – A knowledge and understanding of revenue sources increases the reliability of the revenue system. The City will understand its revenue sources and enact consistent collection policies to provide assurances that the revenue base will materialize according to budget. 3. Equity – The City shall make every effort to maintain equity in its revenue system; i.e., the City should seek to minimize or eliminate all forms of subsidization between entities, funds, services, utilities, and customer classes, and ensure an on-going return on investment for the City. a. The City will make every effort to recognize the benefit that City tax payers contribute to City programs and services. b. The annual Recreation residential membership rates are established at 75% of non-residential rates plus or minus 10% at the discretion of the Parks and Recreation Director in keeping with the targeted market cost recovery. 4. Revenue Adequacy – The City should require there be a balance in the revenue system; i.e., the revenue base will have the characteristics of fairness and neutrality as it applies to cost of service, willingness to pay, and ability to pay. Overall Operational Cost Recovery for Recreation is targeted to be between 50 – 60%, with some variance in individual programs. 5. Realistic and Conservative Estimates – Revenues will be estimated realistically, and conservatively, taking into account the volatile nature of various revenue streams. 6. Administration – The benefits of a revenue source should exceed the cost of levying and collecting that revenue. 7. Diversification and Stability – A diversified revenue system with a stable source of income shall be maintained. This will help avoid instabilities in revenue sources due to factors such as fluctuations in the economy and variations in the weather. Page 168 of 223 FY20201 Annual Budget B. Other Considerations – The following considerations and issues will guide the City in its revenue policies concerning specific sources of funds: 1. Cost/Benefit of Incentives for Economic Development – The City will use due caution in the analysis of any incentives that are used to encourage development. A cost/benefit (fiscal impact) analysis will be performed as part of the evaluation. 2. Non-Recurring Revenues – One-time or non-recurring revenues should not be used to finance current ongoing operations. 3. Sustainable Revenues – Sustainable means revenue that is consistently available year after year, and includes revenues realized subsequent to adopted projections. 4. Property Tax Revenues – Annually, the City will forecast property tax revenue as part of the budget process. Certified Assessed Value Reports from the Williamson Central Appraisal District are used to forecast property tax. The City will comply with State law regarding publication notices and Truth in Taxation requirements. 5. Interest Income – Interest earned from investments will be distributed to the funds in accordance with the average daily cash balance of the fund from which the monies were provided to be invested. 6. User-Based Fees and Service Charges – For services associated with a user fee or charge, the direct or indirect costs of that service will be offset by a fee where possible. The City will review fees and charges no less than once every five years on a rotating schedule to ensure that fees provide adequate coverage for the cost of services. The City Council will determine how much of the cost of a service should be recovered by fees and charges. 7. Enterprise Activity Rates – The City will review and adopt utility and airport rates as needed to generate revenues required to fully cover operating expenses, meet the legal requirements of all applicable bond covenants, and provide for an adequate level of working capital. Enterprise rates will be reviewed annually as part of the budget process. A rate study will be conducted every 3 years to review rate methodology and ensure revenues will meet future needs. All enterprise rates will be based on standardized cost of service methodologies and conservation goals. a. Water Rates will recognize at least 75% of the fixed cost of service, including debt payments and ROI costs, within the monthly base charge determined by meter size. Volumetric charge will recognize the balance of fixed costs not included in the base rate, plus all variable costs associated with procuring and treating water. . b. Wastewater Rates are fixed for all residential customers based on the cost of providing services. Commercial customer rates are fixed and volumetric depending on size and specifications of each commercial customer. c. Electric Rates include 100% of fixed costs within the base rate, and demand rates, with all variable costs included in the kWh rate. The Power Cost Adjustment (PCA) Factor and Transmission Cost Adjustment (TCA) Factor are determined by comparing forecasted costs against actual costs in a budget year, and seek to recover/credit variances within 6 to 12 months. For reference, see Code of Ordinances 13.04.075 and 13.04.080. Page 169 of 223 FY20201 Annual Budget d. Stormwater Drainage Fees are based on a mathematical calculation using impervious cover and applied in compliance with State Law. e. Solid Waste and Environmental Services Rates are based on the wholesale cost of service and retail incentives for conservation, plus a return to the General Fund for wear and tear of heavy trucks on City streets, a franchise fee, and an administrative allocation for managing the solid waste contract and solid waste departmental programing. f. Airport Fuel and Lease Rates are based on the cost of the fuel plus a profit margin to fund operations, capital improvement, contingency, and debt service requirements. 8. Internal Cost Recovery Fees – Additionally, enterprise activity rates will include transfers to and receive credits from other funds as follows: a. General and Administrative Charges – Administrative costs should be charged to all funds for services of general overhead, such as administration, finance, customer billing, legal and other costs as appropriate. These charges will be determined through an indirect cost allocation following accepted practices and procedures and reviewed annually by the City’s external auditors. b. Payment for Return on Investment – The intent of this transfer is to provide a benefit to the citizens for the ownership of the various utility operations they own. For all utilities except for Electric: • In-Lieu-of-Franchise-Fee. This transfer, currently 3% of operating revenues generated inside the City, is consistent with the franchise rates charged to investor owned utilities franchised to operate within the City. • Return on Investment. The return on investment (ROI) transfer for In-City utility customers is currently calculated at 7% of operating revenues for all non-electric utilities. ROI for water and sewer customers outside the City is 10% of operating revenues. The Franchise and Return on Investment for the Electric Utility are both derived from the base monthly charge gross revenue and kWh sold. For customers inside the City, the franchise fee is $0.002947/kWh sold, and the Return on Investment is 7% of gross revenue of the base monthly charge, and $0.007253/kWh sold. For customers outside the City, there is no franchise fee to the City of Georgetown; however, those customers may be subject to franchise fees in the jurisdiction in which they reside. Outside the City customers are charged a Return on Investment equal to 7% of gross revenue of the base monthly charge, and $0.0102/kWh sold. 9. Revenue Monitoring – Received revenues will be regularly compared to budgeted revenues and variances will be investigated, and any abnormalities will be included in the quarterly report to the City Council. 10. Other Funding Alternatives When at all possible, the City will research alternative funding opportunities prior to issuing debt or increasing user-related fees. Page 170 of 223 FY20201 Annual Budget a. Grants – All grant applications must be approved by the City Council prior to being submitted to a granting agency. Prior to submittal to Council, departments will verify that the benefits of the grant exceed the cost of grant administration and will also provide the required grant forms to Finance for review in accordance with the Grant Acquisition, Management, and Compliance Policy. Finance will review and sign the forms which provides detailed information including, but not limited to, the term of the grant, any matching requirements, the resulting operational requirements once the grant is discontinued, and a budget request detailing the line items to be effected, all of which should be included in the Council agenda item packet requesting approval to apply. The City Council must also authorize acceptance of any grant awards received. b. Use of Reserve Funds – The City may authorize the use of reserve funds to potentially delay or eliminate a proposed bond issue. This may occur due to higher than anticipated fund balances in prior years, thus eliminating or reducing the need for debt proceeds, or postpone a bond issue until market conditions are more beneficial or timing of the related capital improvements does not correspond with the planned bond issue. Reserve funds used in this manner are replenished upon issuance of the proposed debt. c. Developer Contributions – The City will require developers who negatively impact the City's utility capital plans offset those impacts. These policies are further defined within the City's utility line extension policy and other development regulations. d. Leases – The City may authorize the use of lease financing for certain operating equipment when it is determined that the cost benefit of such an arrangement is advantageous to the City. e. Impact Fees – The City will impose impact fees as allowable under state law for both water and wastewater services. These fees will be calculated in accordance with statute and reviewed at least every three years. All fees collected will fund projects identified within the Fee study and as required by state laws. V. EXPENDITURE MANAGEMENT A. Appropriations – The point of budget control is at the department level budget for all funds. The Charter (Section 6.03) provides that any transfer of appropriation between funds must be approved by the City Council and that the City Manager, without City Council approval, is authorized to transfer appropriations among departments, within the same operational division and fund. B. Expenditure Monitoring – Expenditures and encumbrances will be regularly compared to budget, variances will be investigated, and any abnormalities will be included in the quarterly report to the City Council. Projected year-end expenditures will be reported in the annual budget. C. Personnel Costs – Costs related to salaries and benefits are budgeted at 100% total costs, assuming open positions are filled throughout the fiscal year. New positions that are added during the budget process may have staggered hire dates with appropriate costs reflected in the budget. 1. Vacancy Factor – Major Funds with Personnel Budgets will include a vacancy factor of at least 1% of total fund salaries and related benefits (retirement, FICA, Medicare) to offset salary savings within the budget. The vacancy factor will be budgeted as a negative expense within the fund. This factor Page 171 of 223 FY20201 Annual Budget will be reduced throughout the year as vacant positions are recognized within the department budget. Compliance Status – General Fund, Electric Fund, Water Fund and Joint Services Fund FY2020 FY2021 in compliance. 2. Benefit Payout Reserve – The City will establish a benefit payout reserve equal to 15% of the accrued benefit liability for employees in the General and Joint Services Funds who are currently eligible to retire. Only terminating employee benefit expenses may be paid from this reserve. This reserve shall be funded as an offset to the vacancy factor. Compliance Status – Benefit payout reserve FY20 2120 in compliance. 3. Position Control – The annual budget includes a set number of positions within departments when approved and adopted by City Council. Additional positions cannot be added without approval of the City Council. The City Manager may approve the transfer of authorized positions between departments if funds are available within the department. 4. Use of Excess Salary Savings – Departmental savings generated due to open positions or other salary line item savings cannot be spent by the department unless previously approved by the City Manager and validated by Finance as excess funds. D. Special Purpose Funding – In order to support community assistance programs, the City designates specific funding for special purposes, including Social Services, Children’s Programs, and Public Art. The City reserves the ability to cap this special purpose funding when necessitated by budget contingency or compliance issues, such as revenue shortfalls, or other reasons as determined by City Council. 1. Strategic Partnerships for Community Services – The City of Georgetown values partnerships with organizations that are committed to addressing our communities’ greatest public challenges and has identified key priorities in the following areas: a. Public Safety b. Transportation c. Housing d. Parks & Recreation e. Veteran Services f. Safety Net The City has targeted funding for these programs to be $5.00 per capita, which may be adjusted to offset the effects of general inflation based upon Consumer Price Index. If previous funding levels are higher than the targeted amount, and to avoid significant reductions in levels of funding, the City Council shall seek to attain this target chiefly through population growth. These funds will be allocated and paid according to the City Council’s guidelines for such programs. Compliance Status – FY202120 in compliance. Page 172 of 223 FY20201 Annual Budget 2. Public Art Funding – The City will annually allocate $43,000 of funding for Public Art in the Tourism Fund. Any unspent funds will accumulate and be reallocated in the following budget year. Disbursement of these funds will be determined by the City’s Arts & Culture Advisory Board. Compliance Status – FY2021 in compliance. Every effort will be made to include public art funding in future City facilities whose primary purpose is for public use. These projects will include a reasonable allowance for public art that fits the scope and purpose of the building so long that it does not negatively impact the project cost beyond the original budget. In the event there is cost savings in the construction of City Facilities, the City Council may consider utilizing that savings on the purchase of public art for the facility. E. Purchasing – The City will maintain and regularly review written Purchasing Policies. All City purchases of goods or services will be made in accordance with the City’s Charter, current Purchasing Policy and with State law. The following table shows a summary of requirements for purchases of goods and services and does not substitute the formal Purchasing Policies. Dollar Limits: Procurements: Requirements: $3,000 and less Under the small purchase limit No competitive bids and City credit cards may be used. $3,001 up to $50,000 Within informal bid limit A minimum of three informal competitive bids required unless exempted; Historically Underutilized Business (HUB) requirements apply in accordance with state law. $50,001 and above In excess of the informal bid limit Formal solicitations, which includes public notices, required unless exempted. Advisory board review and recommendation may be required. Council approval required. Common exemptions to the formal solicitation process include the procurement of professional services, the purchase of goods or services from a sole source provider, and purchases for public health emergencies. In addition to the above, all purchases must be approved according to signature authority limits. F. Contracts, Change Orders and Amendments – Contracts and related change orders and amendments must follow the City’s Purchasing Policies and State Law. Contract term lengths should balance the need for value as well as the ability to respond to changing conditions. G. Prompt Payment – In accordance with State Law, all invoices approved for payment by the proper City authorities shall be paid within thirty (30) calendar days of receipt of goods or services or invoice date, whichever is later in accordance with State law. The City will take advantage of all purchase discounts, when possible. Page 173 of 223 FY20201 Annual Budget H. Risk Management – The City will pursue every opportunity to provide for the Public’s and City employees’ safety and to manage its risks. The goal shall be to minimize the risk of loss of resources through liability claims with an emphasis on safety programs. I. Retirement Benefits – Proposals to revise benefits administered and provided by the Texas Municipal Retirement System shall include a written description, and, detailed and summary numerical assessments of the changes that would result from the proposed benefit revision. 1. The numerical assessments shall include the following: a. The estimated change to the TMRS contribution rate that would result from the proposed change in benefits, expressed as a percentage of employee pay and as an annual dollar amount to the General Fund and to each City fund. b. The estimated change to the City’s unfunded pension liability, expressed as a dollar amount. c. The estimated change to the City’s actuarial funding ratio. 2. The description and numerical assessments must be provided to the City Council at least 72 hours prior to consideration and approval, and must be read aloud to the Council prior to Council consideration. 3. The estimated changes to the City’s contribution rate and the unfunded pension liability presented pursuant to the section must be based on information provided by the TMRS actuary or by a professional actuary authorized by the TMRS to provide such information. 4. Proposals to revise TMRS benefits must be voted on individually as part of the City Council’s legislative agenda. 5. The City will amortize any unfunded actuarial liability (UAAL) over a period not to exceed the amortization period used by the TMRS actuary. The City may amortize its UAAL more quickly by making contributions to TMRS in excess of the rate specified by TMRS. 6. The City may elect to pay a higher contribution rate than required by the TMRS, to reduce the City’s unfunded pension liability. Such payment will be approved and authorized by the City Council as part of the City's annual budget process. J. Retirement Cost-of-Living Adjustment 1. Within 60 days of when the TMRS annual funding update becomes available each year, staff will review and may prepare a summary of costs and options for potential cost-of-living adjustment (COLA) for City of Georgetown retirees. 2. Consistent with state statutes governing the Texas Municipal Retirement System, the City may provide an automatic COLA for members of the TMRS who are retired from the City of Georgetown and receiving a monthly retirement benefit from the TMRS. Page 174 of 223 FY20201 Annual Budget 3. The City Council may adjust the COLA provided to city retirees based upon the funding level of the City’s pension plan, as calculated by the TMRS, as follows: When the funding level of the City’s pension plan is The COLA should be Less than 70.0% Zero 70.0% to 79.9% 0.3% of CPI 80.0% to 89.9% 0.5% of CPI 90.0% and greater 0.7% of CPI 4. Adjustments made pursuant to Subsection J.3. should reflect the reciprocal effect of the prospective change in the COLA on the funding level of the City’s pension plan. K. Deferred Compensation Benefits – In addition to the retirement benefit administered by the TMRS, the City will sponsor a Deferred Compensation 457 plan, which is a supplementary individual retirement savings plan. The City will encourage employee participation in this plan. VI. STAFFING AND COMPENSATION City Council and Management recognize the importance of attracting, hiring, developing, and retaining the best people, and compensating them for the value they create. Our outstanding and innovative City employees work diligently to bring the Vision of Council to life and deliver exceptional services to our customers while exemplifying our Core Values. The following programs are subject to available funding in the annual operating budget. A. Adequate Staffing – Staffing levels will be adequate for the fiscal functions of the City to operate effectively. Workload allocation alternatives will be explored before adding additional staff. B. Competitive Compensation – In order to maintain a competitive pay scale, the City has implemented a Competitive Employee Compensation Maintenance Program to address competitive market factors and other issues impacting compensation. The program consists of: 1. Annual Pay Plan Review – To ensure the City’s pay system is accurate and competitive within the market, the City will review its pay plans annually for any potential market adjustments necessary to maintain the City’s competitive pay plans. 2. Pay for Performance – Each year the City will fund performance based pay adjustments for regular non-public safety personnel. This merit-based program aids in retaining quality employees by rewarding their performance. Pay for Performance adjustments are based on the employee’s most recently completed performance evaluation. Page 175 of 223 FY20201 Annual Budget 3. Public Safety Steps – Each year the City will fund anniversary step increases for public safety sworn personnel consistent with public safety pay scale design. C. Self-Insurance Program – The City is committed to providing quality healthcare insurance that offers the most flexibility in health benefits and options to its employees. In order to provide the most cost effective solution, the City has determined that establishing a self-funded health insurance plan offers the greatest opportunity to mitigate future cost increases while offering quality health care services to its employees. The City has established a mechanism to manage the accounts and payments associated with this program. Per GASB Statement No. 66, such funding should be accounted for as an Internal Service Fund (ISF). 1. Employee Health Insurance ISF – This fund contains premium contributions from employees and budgeted health insurance contributions included in the City’s annual budget process. To maintain stable revenue to this fund, and to clearly set expenditure expectations for departments, any budgeted appropriations for employee health insurance that are unused at the end of each fiscal year will be transferred back to the self-insurance fund. 2. Self-Insurance Reserves – Annually through the budget process, staff and the City’s Health Benefit Consultant firm will evaluate and recommend to Council the appropriate funding levels for two reserves. a. Incurred but Not Reported (IBNR) Reserve: In the event the City stopped self-insuring for health benefits and was required to pay incurred costs, the City will reserve between 5 and 10 percent of the annual costs of claims, benefit administration and stop loss coverage. Compliance Status – IBNR reserve FY202120 in compliance. b. Rate Stabilization Reserve: To alleviate shocks to the City and employees due to sharp increases in health insurance costs, the City will reserve between 10 and 20 percent of annual medical claims, benefit administration and stop loss coverage. Staff and the benefits consultant will consider a 3 year forecast on premiums when determining to utilize the funds or rebuild the reserve. Compliance Status – Rate stabilization reserve FY202120 in compliance. 3. Employee Premiums – Annual premiums will be recommended to City Council through a collaborative process between the City’s Employee Benefit Committee and external Health Benefits consulting firm using historical data, reserves history and other analytic analysis. VII. FUND BALANCE POLICIES The City’s Fund Balance is the accumulated difference between assets and liabilities within governmental funds, and it allows the City to meet its contractual obligations, fund disaster or emergency costs, provide cash flow for timing purposes and fund non-recurring expenses appropriated by City Council. This policy establishes limitations on the purposes for which Fund Balances can be used in accordance with Governmental Accounting Standards Board (GASB) Statement Number 54. The City’s Fund Balance will report up to five components: Page 176 of 223 FY20201 Annual Budget A. Non-spendable Fund Balance – includes inherently non-spendable assets that will never convert to cash, as well as assets that will not convert to cash soon enough to affect the current financial period. Assets included in this category are prepaid items, inventory and non-financial assets held for resale. B. Restricted Fund Balance – represents the portion of fund balance that is subject to legal restrictions, such as grants or hotel/motel tax and bond proceeds. C. Committed Fund Balance – describes the portion of fund balance that is constrained by limitations that the City Council has imposed upon itself, and remains binding unless the City Council removes the limitation. D. Assigned Fund Balance – is that portion of fund balance that reflects the City’s intended use of the resource and is established in a less formal method by the City for that designated purpose. E. Unassigned Fund Balance – represents funds that cannot be properly classified in one of the other four categories. VIII. LONG-TERM LIABILITY RESERVES The City of Georgetown recognizes certain long-term unfunded commitments and contingencies that will require substantial funding at some point in the future. The City is committed to addressing these commitments in a fiscally prudent method by acknowledging their future financial impacts and developing strategies and designated reserve funds to mitigate those future impacts. A. The Finance Director will maintain a list of unfunded liabilities. The list will be included in the quarterly financial report to Council and considered during the annual budget process. IX. BUDGET CONTINGENCY PLAN This policy is designed to establish general guidelines for managing revenue shortfalls resulting from local and national economic downturns that adversely affect the City's revenue streams. A. Immediate Action – Once a budgetary shortfall is projected, the City Manager will take the necessary actions to offset any revenue shortfall with a reduction in current expenses. The City Manager may: 1. Freeze all new hire and vacant positions except those deemed to be a necessity. 2. Review all planned capital expenditures. 3. Delay all "non-essential" spending or equipment replacement purchases. The City Manager shall report in a timely manner to the City Council the projected shortfall and the actions taken to resolve it. B. Further Action – If the actions identified in subsection A are insufficient to offset the projected revenue deficit for the current fiscal year, the City Council may approve the following actions, in the order listed: 1. Apply unspent, unobligated surplus funds from prior fiscal years to fund one-time costs in the current fiscal year budget. 2. Authorize the use of the General Fund Economic Stability Reserve pursuant to Section XV.A.2.b. Economic Stability Reserve., contingency reserves, capital reserves or any other reserves appropriate as outlined in the sections XII. CAPITAL MAINTENANCE AND REPLACEMENT and XV. FINANCIAL CONDITIONS, RESERVES, AND STABILITY RATIOS Page 177 of 223 FY20201 Annual Budget 3. Direct other reductions in services, including workforce reductions. 4. Authorize a temporary reduction in one or more fund’s contingency reserves from 90 days to 75 days. the unobligated fund balance in the General Fund, pursuant to Section XV.A.2.a. Base Level Reserve of this policy, from 90 to 75 days. C. Replenish Fund Balance – Generally, if any existing reserve is used as described above in the budget contingency plan, the reserve should be restored in the next fiscal year. If the restoration within one year is impractical or places and undo strain of City services, staff shall recommend to Council an alternative timeline that is subject to Council approval. As soon as practical, without placing undue strain on City services, the City Council shall increase the unobligated fund balance in the General Fund, up to the 90-day amount required in Section XV.A.2.a. Base Level Reserve of this policy and shall restore the General Fund Economic Stability Reserve as required in Section XV.A.2.b of this policy. X. CAPITAL IMPROVEMENT PROGRAM (CIP) BUDGET The City’s goal is to maintain City facilities and infrastructure in order to provide excellent services to the customers within the community, meet growth related needs, and comply with all state and federal regulations. A. Preparation – The City annually updates and adopts a five-year Capital Improvement Program (CIP) schedule as part of the operating budget adoption process. The plan is reviewed and adjusted annually as needed, and year one is adopted as the current year capital budget. The capital budget will include all capital projects, capital resources, and estimated operational impacts. 1. Needed capital improvements are identified through system models, repair and maintenance records and growth demands. 2. A team approach will be used to prioritize CIP projects, whereby City staff from all operational areas provide input and ideas relating to each project and its effect on operations. 3. Citizen involvement and participation will be solicited in formulating the capital budget through master planning processes, board meetings, public hearings and other forums. 4. Capital infrastructure necessary to meet the requirements of the City’s Annexation Plan will be identified separately within the CIP plan, so that funding alternatives can be developed if needed. Prior to Council approval, the following Advisory Boards will review the Capital Projects budget and contracts for expenditures: Georgetown Utility Systems Advisory Board (GUS)Electric Utility Board Water Utility Board Georgetown Transportation Advisory Board (GTAB) General Government and Finance Advisory Board (GGAF) Parks Advisory Board Georgetown Transportation Enhancement Corporation (GTEC) Page 178 of 223 FY20201 Annual Budget Electric Water Wastewater Water Wastewater Streets Stormwater Drainage Airport Facilities, Fleet, IT and Other General Government Capital Projects Parks and Recreation Transportation projects related to economic development B. Control – All capital project expenditures must be appropriated in the capital budget. C. Financing Programs – Where applicable, assessments, impact fees, pro rata charges, or other fees should be used to fund capital projects which have a primary benefit to specific identifiable property owners. Debt financing is referenced in Section XIV. Debt Management of this document. XI. CAPITAL MAINTENANCE AND REPLACEMENT The City recognizes that deferred maintenance increases future capital costs. Therefore, a portion of all individual funds with infrastructure should be budgeted each year to maintain the quality within each system. A. Infrastructure Maintenance — On-going maintenance and major repair costs are included as expense within the departmental operating budgets. These costs are generally considered system repairs and are not capitalized for accounting purposes. They include such items as park and recreation facility repairs, street repair, water line repairs and other general system maintenance. B. Modified Approach — Pavement Condition Index (PCI) — Governmental Accounting Standards Board Statement # 34 provides for an alternative approach to depreciation for measuring the value of infrastructure assets and the related costs incurred to maintain their service life at a locally established minimum standard. The City has elected to implement this modified approach in maintaining its non-enterprise fund infrastructure assets. In order to adopt this alternative method, the City has implemented an asset management system that determines if the minimum standards are being maintained. This measurement system will be updated at least every 3 years. The City uses a Pavement Management Information System to track the condition levels of each of the street sections. The condition of the pavement is based on the following factors: • Type of Distress • Amount of Distress • Severity of Distress • Deduct Values (function of first three) The Pavement Condition Index (PCI) is a measurement scale is based upon a condition index ranging from zero for a failed pavement to 100 for pavement with perfect condition. The condition index is used to classify pavement in the following conditions: PCI Rating 100 – 85 Good 85 – 45 Fair 45 – 0 Poor Page 179 of 223 FY20201 Annual Budget The City’s administrative policy is to achieve an average PCI level of 85. An 85 PCI is considered maintaining the streets in a “good” condition. Staff will prepare a street maintenance budget that meets this target for Council’s consideration during the budget process. The PCI level as of 2018 was 85.5. C. Internal Service Funds Capital Maintenance & Replacement – The City currently utilizes internal service funds to maintain and replace existing assets. Assessments are made to other funds for the use of existing equipment and to purchase new equipment. In this way, suitable funds are available for the purchase of operational assets without the issuance of debt. 1. Fleet Maintenance and Replacement – The City has a major investment in its fleet of cars, trucks, tractors, and other equipment. The City will anticipate replacing existing equipment, as necessary and will establish charges that are assigned to the using departments to account for the cost of that replacement. Vehicle maintenance is also allocated in this manner. The targeted asset replacement reserve amount is the average (1/5th) of the next five years on the replacement schedule for cash- funded vehicles. Compliance Status – Fleet replacement reserve FY20210 in compliance. It is the general policy of the City not to hold back vehicles or equipment from replacement or disposition. Departmental requests to hold back units must be approved by the Fleet Manager and the City Manager. 2. Technology – It is the policy of the City to plan and fund the maintenance and replacement of its computer network and other technology systems. A reserve will be established within the ISF for replacement of major systems and will be funded over time through excess revenues within the Fund. The targeted amount is the average (1/5th) of the next five years on the replacement schedule. While cash funding is preferred, major IT systems and projects may require debt that is amortized over a shorter useful life appropriate for the software or hardware. Compliance Status – IT replacement reserve FY20210 in partial compliance. The IT Fund will need to increase recovery rates in future years to cover the purchase of the fiber asset from the Electric Fund. 3. Facilities Maintenance – The City has established an on-going maintenance program, which includes major repairs, equipment, as well as contracts for maintaining City facilities. The City has anticipated a useful life of such equipment and established a means of charging those costs to the various departments in order to recognize the City’s continuing costs of maintaining its facilities. Determination for facility repairs is based on useful life of the various elements of each facility. A proportional cost for each element is expensed within the budget for capital replacement. The targeted replacement reserve amount is the average (1/5th) of the next five years on the replacement schedule. Compliance Status – Facilities replacement reserve FY20210 partial compliance. Due to the economic impacts of the pandemic, the City has elected not to increase recovery rates to build the reserve to compliance. It is estimated to take 21 additional years to build the replacement reserve. D. Departmental Capital Maintenance & Replacement – The City also utilizes department capital maintenance and replacement schedules for specialized assets and equipment necessary to provide services. Page 180 of 223 FY20201 Annual Budget 1. Parks and Recreation – As part of the City’s on-going maintenance program, the City also recognizes the need to regularly maintain and replace playgrounds, equipment and facilities that are part of the City’s Parks and Recreation system. Separate replacement and maintenance schedules will be maintained for these items including, but not limited to, playground equipment, buildings, sport courts, trees and grounds, and restroom facilities. The City’s goal is to provide level on-going funding to ensure safe, well-maintained facilities for its citizens. The current funding level is an annual $297,000 transfer from the General Fund. Compliance Status – Parks maintenance replacement FY20210 in partial compliance. Due to the economic impacts of the pandemic, the General Fund is transferring $50,000. 2. Public Safety Equipment – As part of the City’s on-going maintenance program, the City also recognizes the need to regularly maintain and replace specialized equipment in Police and Fire. Separate replacement and maintenance schedules will be maintained for these items including but not limited to for Fire: SCBA’s and other firefighting equipment and protective gear; and for Police: bullet proof vests, armaments and other tactical equipment. The City’s goal is to provide level on- going funding to ensure proper protection for employees and residents. The current funding level is an annual appropriation in the General Fund of $80,000 for Fire and $88,000 for Police. Compliance Status – Public safety equipment replacement FY20210 in partial compliance. Due to the economic impacts of the pandemic, reductions were made to General Fund base budgets including public safety equipment. E. Surplus Property 1. From time to time it is necessary to dispose of certain vehicles or equipment that have been procured with City funds and used in City services. Individual surplus property items with expected sales value in excess of $50,000 must be approved by the City Council prior to disposition. 2. City staff will maintain reports and records of all surplus property dispositions in accordance with good internal controls. XII. ACCOUNTING, AUDITING, AND FINANCIAL REPORTING A. Accounting – The City is solely responsible for the recording and reporting of its financial affairs, both internally and externally. The Finance Director is responsible for establishing the structure for the City’s Chart of Accounts and for assuring that procedures are in place to properly record financial transactions and report the City’s financial position. B. General Government and Finance Advisory Board (GGAF) – The City may establish a subcommittee consisting of at least 2 City Council members and not more than 3 citizens that may meet monthly to provide additional oversight to the City’s Finance operations. This subcommittee will also review general government items that are not reviewed by another City advisory board before being presented to City Council. The City’s Finance Director will be the liaison for this subcommittee. C. Audit of Accounts – In accordance with the Charter, an independent audit of the City accounts will be performed every year. The auditor is retained by and is accountable directly to the City Council. The auditing Page 181 of 223 FY20201 Annual Budget firm will serve for up to 5 years, at which time, the City will re-bid these services and change firms if deemed necessary by GGAF and City Council. D. External Reporting – Upon completion and acceptance of the annual audit by the City’s auditors, the City shall prepare a written Comprehensive Annual Financial Report (CAFR) which shall be presented to the City Council within 180 calendar days of the City’s fiscal year end. The CAFR shall be prepared in accordance with Generally Accepted Accounting Principles (GAAP) and shall be presented annually to the Government Finance Officer Association (GFOA) for evaluation and consideration for the Certificate of Achievement in Financial Reporting. XIII. ASSET MANAGEMENT A. Cash Management and Investments – The City Council has formally approved a separate Investment Policy for the City of Georgetown that meets the requirements of the Public Funds Investment Act (PFIA), Section 2256 and 2257 of the Texas Local Government Code. This policy is reviewed annually by the City Council and applies to all financial assets held by the City and applies to all entities (component units) included in the City’s Comprehensive Annual Financial Report (CAFR) and/or managed by the City. Refer to the separate policy for details regarding: 1. Statement of Cash Management Philosophy 2. Objectives 3. Safekeeping and Custody 4. Standard of Care and Reporting 5. Investment Strategies 6. Authorized Investments and Approved Broker/Dealer List. B. Fixed Assets – These assets will be reasonably safeguarded and properly accounted for, and prudently insured. 1. Capitalization Criteria – For purposes of budgeting and accounting classification, the following criteria must be met in order to be capitalized: a. The asset owned by the City b. The expected useful life of the asset must be longer than one year, or extend the life of an identifiable existing asset by more than one year c. The original cost of the asset must be at least $5,000 d. The asset must be tangible, or uniquely intangible like a trademark. On-going repairs and general maintenance are not capitalized. Public Education and Government (PEG) Funds will capitalize assets in aggregate over $1,000 on an annual basis. 2. New Purchases – All costs associated with bringing the asset into working order will be capitalized as part of the asset cost. This will include startup costs, engineering or consultant type fees as part Page 182 of 223 FY20201 Annual Budget of the asset cost once the decision or commitment to purchase the asset is made. The cost of land acquired should include all related costs associated with its purchase. 3. Improvements and Replacement – Improvements will be capitalized when they extend the original life of an asset or when they make the asset more valuable than it was originally. The replacement of assets components will normally be expensed unless they are a significant nature and meet all the capitalization criteria. 4. Contributed Capital – Infrastructure assets received from developers or as a result of annexation will be recorded as equity contributions when they are received. 5. Distributions Systems – All costs associated with public domain assets, such as streets and utility distribution lines will be capitalized in accordance with the capitalization policy. Costs should include engineering, construction and other related costs including right of way acquisition. 6. Reporting and Inventory – The Finance Division will maintain the permanent records of the City’s fixed assets, including description, cost, department of responsibility, date of acquisition, depreciation and expected useful life. Periodically, random sampling at the department level will be performed to inventory fixed assets assigned to that department. Responsibility for safeguarding the City’s fixed assets lies with the department supervisor or manager whose department has been assigned the asset. XIV. DEBT MANAGEMENT The City of Georgetown recognizes the primary purpose of capital facilities is to provide services to the community. Using debt financing to meet the capital needs of the community must be evaluated according to efficiency and equity. Efficiency must be evaluated to determine the highest rate of return for a given investment of resources. Equity is resolved by determining who should pay for the cost of capital improvements. In meeting demand for additional services, the City will strive to balance the needs between debt financing and “pay as you go” methods. The City realizes that failure to meet the demands of growth may inhibit its continued economic viability, but also realizes that too much debt may have detrimental effects on the City’s long-range financial condition. The City will issue debt only for the purpose of acquiring or constructing capital assets for the general benefit of its citizens and to allow it to fulfill its various purposes as a city. The City will seek input on major projects funded with debt via bond elections, master planning exercises, board meetings, budget workshops, and other methods as needed. A Debt Condition Update report will be provided annually. A. Usage of Debt – Long-term debt financing will be considered for non-continuous capital improvements of which future citizens will benefit. Alternatives for financing will be explored prior to debt issuance and include, but not limited to: • Grants • Use of Reserve Funds • Use of Current Revenues • Contributions from developers and others Page 183 of 223 FY20201 Annual Budget • Leases • Impact Fees When the City utilizes long-term financing, it will ensure that the debt is soundly financed by conservatively projecting revenue sources that will be used to pay the debt. It will not finance the improvement over a period greater than the useful life of the improvement and it will determine that the cost benefit of the improvement, including interest costs, is positive to the community. The City may utilize the benefits of short-term debt financing to purchase operating equipment provided the debt doesn’t extend past the useful life of the asset and the potential impact to the tax rate is within policy guidelines. Page 184 of 223 FY20201 Annual Budget B. Types of Debt 1. General Obligation Bonds (GO’s) – General obligation bonds must be authorized by a vote of the citizens of Georgetown. They are used only to fund capital assets of the general government and are not to be used to fund operating needs of the City. The City’s ad valorem taxing authority backs general obligation bonds. Conditions for issuance of general obligation debt include: a. When the project will have a significant impact on the tax rate; b. When the project may be controversial even though it is routine in nature; or c. When the project falls outside the normal bounds of projects the City has typically done. For debt programs that include multiple projects that will be issued over multiple years at the discretion of the City Council, the City may approve an Agreement with the Voters to manage future property tax rate impacts. The Agreement with the Voters will be included in educational information for all applicable GO Bond elections, and will include a maximum annual tax rate increase and a cumulative total per bond authorization maximum tax rate increase. The City will include these impacts in its annual Debt Condition report. The City Council will carefully manage the unissued GO Bond authorization through annual review of related projects to ensure full disclosure on future timing of projects included in the bond package. Timing of authorized projects and related bond issuance will be included in the Annual Budget and published on the City’s website. Any changes to this schedule require specific Council authorization. 2. Revenue Bonds – Revenue bonds will be issued to provide for the capital needs of any activities where the capital requirements are necessary for the continuation or expansion of a service. The improved activity shall produce a revenue stream to fund the debt service requirements of the necessary improvement to provide service expansion. The average life of the obligation should not exceed the useful life of the asset(s) to be funded by the bond issue, and will generally be limited to no more than twenty (20) years. An exception can be made for plant expansions or related system expansions whose useful life is in excess of 30 years. A cost benefit analysis will be done to fully disclose the impacts of extending debt beyond 20 years. 3. Certificates of Obligation, Contract Obligations (CO’s) – Certificates of obligation or contract obligations may be used to fund capital requirements that are not otherwise funded by general obligation or revenue bonds. Debt service for CO’s may be either from general revenues (tax- supported) or supported by a specific revenue stream(s) or a combination of both. Typically, the City may issue CO’s when the following conditions are met: a. When the proposed debt will have minimal impact on future effective property tax rates; b. When the projects to be funded are within the normal bounds of City capital requirements, such as for roads, parks, various infrastructure and City facilities and equipment; and c. When the average life of the obligation does not exceed the useful life of the asset(s) to be funded by the issue. Certificates of obligation will be the least preferred method of financing and will be used with prudent care and judgment by the City Council during the budget development process. Page 185 of 223 FY20201 Annual Budget 4. Self-supporting Certificates of Obligation Debt – Refers to certificates of obligation issued for a specific purpose and repaid through dedicated revenues other than ad valorem taxes. The annual debt requirements are not included in the property tax calculation. Both the Airport and Stormwater Drainage funds will issue this type of debt. In addition, the Electric and Water Services Funds can utilize this method of funding non-system capital assets. The City also issues debt on behalf of the Georgetown Transportation Enhancement Corporation (GTEC) and the Georgetown Economic Development Corporation (GEDCO) whom then pledge 4A and 4B sales tax revenue for the repayment of that debt. Tax Increment Reinvestment Zones also may issue self-supporting debt. 5. Internal borrowing between City Funds – The City Council can authorize use of existing long-term reserves as loans between funds. The borrowing fund will repay the loan at a rate consistent with current market conditions. The loan will be repaid within ten (10) years. The loan will be considered an investment of working capital reserves by the lending fund. 6. Other Short-term Borrowing – The City may authorize the issuance of Public Property Finance Contractual Obligations (PPFCO) which is short-term obligations for the acquisition of personal public property, such as equipment. PPFCOs are payable from either ad valorem taxes or another dedicated revenue stream. Each issuance will be assessed to ensure cost effectiveness and the repayment schedule will not exceed the useful life of the asset. Multiple equipment acquisitions can be grouped in a single PPFCO issue in order to develop economies of scale. C. Method of Sale – The City will use a competitive bidding process in the sale of bonds unless conditions in the bond market or the nature of the issue warrant a negotiated bid or other method. In such situations, the City will publicly present the reasons for the the other methodnegotiated sale. The City will rely on the recommendation of the financial advisor in the selection of the underwriter or direct purchaser. The financial advisor must meet all licensing requirements and comply with all Municipal Securities Rulemaking Board (MSRB) regulations. The City’s financial advisor will not act as the underwriter on any City bond issue. D. Disclosure – Full disclosure of operating costs along with capital costs will be made to the bond rating agencies and other users of financial information. The City staff, with assistance of the financial advisor and bond counsel, will prepare the necessary materials for presentation to the rating agencies and will aid in the production of the Preliminary Official Statements. The City will take responsibility for the accuracy of all financial information released. E. Federal Requirements – The City will maintain written procedures to follow post issuance compliance rules, arbitrage rebate and other Federal requirements. 1. Post issuance tax compliance rules will include records retention, arbitrage rebate, use of proceeds, and 2. Continuing disclosure requirements under SEC Rule 15c2-12, MSRB standards, or as may be required by bond covenants or related agreements. F. Debt Structuring – The City will issue bonds with an average life of twenty (20) years or less, not to exceed the useful life of the asset acquired. The structure should approximate level debt service unless operational matters dictate otherwise. Market factors, such as the effects of tax-exempt designations, the cost of early redemption options and the like, will be given consideration during the structuring of long term debt instruments. Exceptions to the 20 year average life include debt issues for major system expansions, such as Page 186 of 223 FY20201 Annual Budget water, sewer or electric plants, in which case the City may issue debt greater than 20 years since the average life of the asset exceeds 30 years. A cost benefit analysis indicating the impacts of extending debt beyond 20 years will be completed. G. Utility and Self-Supporting Debt Coverage Ratio – Refers to the number of times all utility supported debt service requirements or payments would be covered by the current operating revenues net of on-going operating expenses of the City’s combined utilities (Electric, Water, and Wastewater). The City will maintain a minimum debt service coverage ratio of 1.5 times for the utilities as a whole. The bond ordinances allow the City to forego a debt reserve fund for its utility debt if the coverage is maintained at 1.35 times or better. A coverage ratio of 1.5 times will also be required for all funds issuing self-supporting debt (Airport, Stormwater, GTEC, GEDCO, and TIRZ). Compliance Status – Debt coverage ratio FY20210 in compliance. H. Bond Reimbursement Resolutions – The City may utilize bond reimbursements as a tool to manage its debt issues, due to arbitrage requirements and project timing. In so doing, the City uses its capital reserve cash to delay bond issues until such time when issuance is favorable and beneficial to the City. The City Council may authorize a bond reimbursement resolution for General Capital projects that have a direct impact on the City's ad valorem tax rate when the bonds will be issued within the term of the existing City Council. In the event of unexpected circumstances that delay the timing of projects, or market conditions that prohibit financially sound debt issuance, the approved project can be postponed and considered by a future council until circumstantial issues can be resolved. The City Council may also authorize revenue bond reimbursements for approved utility and other self- supporting capital projects within legislative limits. Currently revenue bonds must be issued within 18 months after an eligible bond funded project is begun. The total outstanding bond reimbursements may not exceed the total amount of the City’s reserve funds. XV. FINANCIAL CONDITIONS, RESERVES, AND STABILITY RATIOS The City of Georgetown will maintain budgeted minimum reserves in the ending working capital/fund balances to provide a secure, healthy financial base for the City in the event of a natural disaster or other emergency, allow stability of City operations should revenues fall short of budgeted projections and provide available resources to implement budgeted expenditures without regard to actual timing of cash flows into the City. Generally, if any existing reserve is used to cover expenses as described, the reserve should be restored in the next fiscal year. If the restoration within one year is impractical or places and undo strain of City services, staff shall recommend to Council an alternative timeline that is subject to Council approval. A. Operational Coverage – The City’s goal is to maintain operations coverage of 1.0 (one), such that operating revenues will at least equal or exceed current operating expenditures. Deferrals, short-term loans, or one- time sources will be avoided as budget balancing techniques. Reserves will be used only for emergencies or non-recurring expenditures, except when balances can be reduced because their levels exceed guideline minimums as stated below. Page 187 of 223 FY20201 Annual Budget 1. Operating Reserves – The City will maintain reserves at a minimum of seventy-five (75) days (20.83%) of net budgeted operating expenditures. Net budgeted operating expenditure is defined as total budgeted expenditures less interfund transfers and charges, capital improvements, direct cost for purchased power, debt service, non-operating special revenue funds and payments to third party grant agents. The amount of these funds are allocated within the following operating funds and using the following guidelines to maintain the fund balance, working capital and retained earnings (reserves) of the various operating funds at levels sufficient to protect the City’s creditworthiness, as well as, its financial position from unforeseeable emergencies. For asset replacement reserves, see Section XI. Capital Maintenance and Replacement. Compliance Status – 75 day citywide reserves FY20210 in compliance. 2. General Fund – General Fund reserves will be assigned on the balance sheet. Reserves are allocated as follows: a. Base Level Reserve – will equal ninety (90) days, or 25%, of current year budgeted operating expenditures designated for emergency use only. If the Base Level Reserve is used during the fiscal year, the balance must return to the ninety (90) day requirement within the following fiscal year’s adopted budget. Compliance Status – General Fund 90 day Reserve FY20210 in compliance. b. Economic Stability Reserve – will equal up to 6% of current year budgeted operating expenditures. The reserve will be designated to temporarily offset a decline in any General Fund revenue source during the current fiscal year or in planning the future budget year. The reserve may be used when growth in any General Fund revenue source from one fiscal year to the next is below zero. The reserve will be available to support only existing programs approved in a prior fiscal year. Used funds shall be restored up to the 6% reserve as soon as practical. Compliance Status – General Fund Stability Reserve FY20210 at 03%. 3. Tourism Fund – A minimum ninety (90) days of operating expenditures will be reserved within the fund balance. These funds are designated to be used to offset any potential revenue shortfall that occurs during the fiscal year and should be replenished in the following fiscal year’s budget. Compliance Status – Tourism Fund Reserve FY20210 in compliance. 4. Joint Services Fund – A minimum ninety (90) days of operating expenses will be reserved for unexpected delays in revenue or emergency expenses. Compliance Status – Joint Services Fund Reserve FY20210 partia l compliance. Due to the economic impact of the pandemic, the City is not increasing recovery rates to build this reserve. It is estimated to take approximately 3 years to build the reserve to 90 days. 5. Fleet Fund – A minimum ninety (90) days of operating expenses will be reserved for unexpected delays in revenue or emergency expenses. Compliance Status – Fleet Fund Reserve FY20210 in compliance. Page 188 of 223 FY20201 Annual Budget 6. Facilities Fund - A minimum ninety (90) days of operating expenses will be reserved for unexpected delays in revenue or emergency expenses. Compliance Status – Facilities Fund Reserve FY20210 in compliance. 7. Information Technology Fund - A minimum ninety (90) days of operating expenses will be reserved for unexpected delays in revenue or emergency expenses. Compliance Status – IT Fund Reserve FY202119 in compliance. 8. Water Services Fund – The Water Fund will maintain the following reserves and assign them on the balance sheet. These reserves are designated to be used to offset potential revenue shortfalls or fund unexpected or emergency expenses that occur during the fiscal year. These reserves should be replenished in the following budget cycle. a. Operations Contingency Reserve – A minimum ninety (90) days or 25% of operating expenses, including wholesale water contracts and net of transfers, designated for unexpected or emergency use during the fiscal year. Compliance Status – Operating Water Fund Reserve FY20210 in compliance. b. Non-Operating Contingency Reserve – to maintain continuity of debt payments, capital projects and to begin recovering from a natural disaster during the lag time of revenue recovery. This reserve will be evaluated annually as part of the budget process, considering the 5 year CIP and future debt requirements. Compliance Status – Non-operating Water Fund Reserve FY20210 in compliance. 9. Stormwater Drainage Fund – The Stormwater Fund will maintain the following reserves and assign them on the balance sheet: a. A minimum ninety (90) days or 25% of operating expenses, will be reserved in fund balance. These funds are designated to be used to offset any potential revenue shortfall that occurs during the fiscal year and should be replenished in the following fiscal year’s budget. Compliance Status – Contingency Reserve FY20210 in compliance. b. A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale). Compliance Status – Debt Service Reserve FY20210 in compliance. 10. Electric Fund – The Electric Fund will maintain the following reserves and assign them on the balance sheet: a. Operations Contingency Reserve – A minimum ninety (90) days or 25% of operating expenses, net of transfers and purchased power, designated for unexpected or emergency use during the fiscal year and to be replenished in the following year’s budget. Page 189 of 223 FY20201 Annual Budget Compliance Status – Operating Contingency reserve FY20210 in compliance. b. Rate Stabilization Reserve – Up to 10% of purchased power costs will be reserved to protect against energy market exposure and to maintain wholesale power contracts and stability until expenses are recovered through revenue generated in the Power Cost Adjustment Factor. Compliance Status – Rate stabilization reserve FY20210 partial in compliance. It is estimated to take 3 years to build this reserve after enacting the new cost of service rate structure and PCA. c. Non-Operating Contingency Reserve – to maintain continuity and begin recovery process from a natural disaster during the lag time of revenue recovery: • 1% of historical rate base (total assets plus accumulated depreciation) • 1/5th of the average cash funded portion of the 5 year CIP • At least 50% of annual debt service payment Compliance Status – Non-operating reserve FY20210 not in partial compliance. It is estimated to take 13 years to complete this reserve after enacting the new cost of service rate structure and PCA. d. Uses of Unanticipated and Unappropriated Electric Fund Balances – In the event that fund balance in the Electric Fund exceeds recommended minimum cash as enumerated in the above reserves, the funds may be used for the following purposes as approved by the City Council: • Reduce the Power Cost Adjustment • Reduce outstanding utility debt • Fund capital projects • Fund other one-time projects or equipment 11. Airport Fund – The Airport Fund will maintain the following reserves and assign them on the balance sheet; a. A contingency reserve of ninety (90) days of operating expenses will be maintained in the fund for unforeseen or emergency expenditures. The reserve will represent all operating expenses minus fuel costs and any transfers. Used funds should be replenished in the following year’s budget. Compliance Status – Contingency Reserve FY20210 in compliance. b. A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale). Compliance Status – Debt Service Reserve FY20210 in compliance. 12. GEDCO Fund – a. A contingency reserve equal to 25% of budgeted sales tax revenue. Compliance Status – Contingency Reserve FY2021 in compliance. Page 190 of 223 FY20201 Annual Budget a.b. A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale). Compliance Status – Debt Service Reserve FY20210 in compliance. 13. GTEC Fund – a. A contingency reserve equal to 25% of budgeted sales tax revenue. Compliance Status – Contingency Reserve FY2021 in compliance. a.b. A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale). Compliance Status – Debt Service Reserve FY20210 in compliance. 14. Rivery TIRZ Fund – A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale). Compliance Status – Debt Service Reserve FY20210 in partial compliance. It is estimated to take two years to complete this new reserve. 15. Downtown TIRZ Fund – A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale). Compliance Status – Debt Service Reserve FY2020 in partial compliance. It is estimated to take one year to complete this new reserve. 15. Cemetery Fund – A perpetual reserve should build over time so that interest earnings can offset annual operational costs. The General Fund makes an annual transfer of $75,000 to this fund. Compliance Status – In FY2021 not in compliance. Due to the economic impact of the pandemic, the General Fund is transferring $35,000. The reserve has $560,000. Annual operational costs are $100,000. With an interest rate of 2%, the reserve needs a balance of $5 million to support operations. This fund is not likely to build this level of reserve without a significant change in revenue. For all other funds, the fund balance is an indication of the balance of each particular fund at a specific time. The ultimate goal of each such fund is to have expended the fund balance at the conclusion of the activity for which the fund was established. Reserve requirements will be calculated as part of the annual budget process and any additional required funds to be added to the reserve balances will be appropriated within the budget. Funds in excess of the minimum reserves within each fund may be expended for City purposes at the will of the City Council once it has been determined that use of the excess will not endanger reserve requirements in future years. This action requires an amendment to the City’s Annual Budget and is outlined in Section III. J. Use of Unanticipated and Unappropriated General Fund Balances. B. Liabilities and Receivables – Procedures will be followed to maximize discounts and reduce penalties offered by creditors. Current liabilities will be paid within 30 days of receiving the invoice. Accounts Receivable procedures will target collection for a maximum of 90 days of service. The Finance Director is authorized to Page 191 of 223 FY20201 Annual Budget write-off non-collectible, non-utility accounts that are delinquent for more than 180 days, and utility accounts delinquent more than 180 days, provided proper delinquency procedures have been followed, and include this information in the Comprehensive Annual Financial Report to the City Council. C. Capital Project Funds – Every effort will be made for all monies within the Capital Project Funds to be expended in a timely manner preferably within thirty-six (36) months of receipt. Due to the long timeline of some projects, unused cash or bond proceeds will be reserved on the fund schedule and appropriated when needed. The fund balance will be invested and income generated will offset increases in construction costs or other costs associated with the project. Capital project funds are intended to be expended totally, with any unexpected excess to be approved for use according to the bond covenant and opinion of bond counsel. D. General Debt Service Funds – Revenues within this fund are stable, based on property tax revenues. Balances are maintained to meet contingencies and to make certain that the next year’s debt service payments may be met in a timely manner. Fund balance should not fall below 45 days annual debt service requirements, in accordance with IRS guidelines. Compliance Status – Debt Fund Reserve FY20210 in compliance. E. Investment of Reserve Funds – The reserve funds will be invested in accordance with the City’s investment policy. F. Ratios/Trend Analysis – Ratios and significant balances will be incorporated into the quarterly financial reports to the City Council for the Electric, Water and General Debt Service Funds. This information will provide users with meaningful data to identify major trends of the City's financial condition through analytical procedures. The following ratios/balances will be used as key financial indicators: • Debt Ratio: Current liabilities plus long-term liabilities divided by total assets CL +LTL/TA AL < 0.5 • Times Coverage Ratio: Operating revenue less operating expense divided by annual debt service (OR-OE)/DSV AL > 1.5 The City will develop minimum/maximum levels for the above ratios/balances through analyzing of City historical trends and future projections. XVI. RISK MANAGEMENT AND INTERNAL CONTROLS A. Written Procedures – Wherever possible, written procedures will be established and maintained by the Finance Director for all functions involving cash handling and/or accounting throughout the City. These procedures will embrace the general concepts of fiscal responsibility set forth in this policy statement. B. Internal Audit Program – An internal audit program will be maintained by the Finance Director to ensure compliance with City policies and procedures and to prevent the potential for fraud. Page 192 of 223 FY20201 Annual Budget 1. Departmental Audits – departmental processes will be reviewed to ensure dual control of City assets and identify the opportunity for fraud potential, as well as, to ensure that departmental internal procedures are documented and updated as needed. 2. Employees or Transaction Review – Programs to be audited include Petty Cash, City Credit Card accounts, time entry, and travel. All discrepancies will be identified, and the employee’s Director will be notified. The City Manager will also be notified depending on the seriousness of the infraction. 3. Fraud Awareness and Reporting – The City will maintain its personnel policy regarding fraud. The will maintain an arrangement with a third party for anonymous reporting of fraud, waste or abuse of City resources. The City will provide training to all City employees on recognizing and reporting fraud. 4. The Finance Director and City Manager will present an annual audit plan to the General Government and Finance board. Results of all internal audits will be provided to the GGAF and City Council at year-end. C. Directors Responsibility – Each Director is responsible for ensuring that good internal controls are followed throughout their department, that all Finance Division directives are implemented and that all independent auditor internal control recommendations are addressed. Departments will develop and periodically update written internal control procedures. D. Cybersecurity – The Information Technology department shall regularly assess new forms of security risk and maintain multiple layers of protections and controls to thwart cyber attacks. The City will provide regular cybersecurity awareness training for all employees. E. Electric Utility Risk – Chapter 13.38 of the City’s Code of Ordinances establishes Council’s authority to oversee all risk of the Electric utility including CRR auctions, wholesale power agreements, futures contracts, and other transactions that expose the City to significant risk. Page 193 of 223 FY2021 Annual Budget Fiscal and Budgetary Policy Adopted: September 22, 2020 I. PURPOSE The City of Georgetown is committed to financial management through integrity, prudent stewardship, planning, accountability, transparency and communication. The broad purpose of the Fiscal and Budgetary Policies is to enable the City and its related component units, including the Georgetown Transportation Enhancement Corporation (GTEC) and the Georgetown Economic Development Corporation (GEDCO), to achieve and maintain a long-term stable and positive financial condition, and provide guidelines for the day-to-day planning and operations of the City’s financial affairs. Policy scope generally spans areas of accounting, operational and capital budgeting, revenue and expenditure management, financial reporting, internal controls, investment and asset management, debt management and forecasting. This is done in order to: A. Demonstrate to the residents of Georgetown, the investment community, and the bond rating agencies that the City is committed to a strong fiscal operation; B. Provide precedents for future policy-makers and financial managers on common financial goals and strategies; C. Fairly present and fully disclose the financial position of the City in conformity to generally accepted accounting principles (GAAP); and D. Demonstrate compliance with finance-related legal and contractual issues in accordance with the Texas Local Government Code and other legal mandates. These policies will be reviewed and updated annually as part of the budget preparation process. II. FUND STRUCTURE AND BASIS OF BUDGETING The budgeted funds for the City of Georgetown include: Governmental Funds: General Fund which accounts for all financial resources except those required to be accounted for in another fund, and include basic governmental services, such as Street Maintenance, Planning and Development, Police, Fire, Parks, as well as Solid Waste Management. Special Revenue Funds (SRF) account for specific revenues that are legally restricted for specified purposes. Examples include Tourism, Parkland Dedication, Library Donations, Animal Services Donations, and Street Maintenance Sales Tax. Debt Service Fund is used to account for the payment of general long-term debt principal and interest. Page 194 of 223 FY2021 Annual Budget Capital Project Funds are used to account for the acquisition or construction of major capital facilities other than those financed by enterprise activities. Proprietary Funds: Internal Service Funds account for goods or services provided by one internal department to another. The City uses this system to recognize cost for fleet replacement and maintenance, facility maintenance, computer replacement and maintenance and employee health insurance costs. Enterprise Funds include the City’s business like activities including all the utility funds and the airport. Basis of Accounting and Basis of Budgeting The City accounts and budgets for all Governmental Funds using the modified accrual basis of accounting. This basis means that revenue is recognized in the accounting period in which it becomes available and measurable, while expenditures are recognized in the accounting period in which the liabilities are incurred. Because the appropriated budget is used as the basis for control and comparison of budgeted and actual amounts, the basis for preparing the budget is the same as the basis of accounting. Exceptions to the modified accrual basis of accounting include: • Encumbrances, which are treated as expenditures in the year they are encumbered, not when expended • Grants, which are considered revenue when awarded, not received • Principal and interest on long-term debt, which are recognized when paid. Proprietary Funds are accounted and budgeted using the full-accrual basis of accounting. Under this method, revenues are recognized when they are earned and measurable, while expenses are recognized when they are incurred regardless of timing or related cash flows. The basis for preparing the budget is the same as the basis of accounting except for principal payments on long-term debt and capital outlay which are treated as budgeted expenses. Exceptions include: • Depreciation which is not budgeted • Non-budgeted accruals such as compensated absences. III. OPERATING BUDGET Budgeting is an essential element of the financial planning, control and evaluation process of municipal government. The operating budget is the City’s annual financial operating plan. The annual budget includes all of the operating departments of the General Fund, proprietary funds, debt service funds, special revenue funds, and capital improvement funds of the City. A. Form of Government – The Charter (Section 1.03) established a Council-Manager Government wherein the City vests power in the City Council to “enact legislation, adopt budgets, determine policies, and appoint the City Manager who shall execute the laws and administer the government of the City.” B. Comprehensive Plan – The Charter (Section 1.08) requires that the City Council “establish comprehensive planning as a continuous and ongoing governmental function in order to promote and strengthen the existing Page 195 of 223 FY2021 Annual Budget role, processes and powers of the City of Georgetown.” The current comprehensive plan is the 2030 Plan adopted in 2006. C. Preparation – The Charter (Section 6.02) requires “a proposed budget prepared by the City Manager and submitted to the City Council at least thirty days prior to the end of the fiscal year. The budget shall be adopted not later than the twenty-seventh day of the last month of the fiscal year. No budget will be adopted or appropriations made unless the total estimated revenues, income and funds available shall be equal to or in excess of such budget or appropriations, except otherwise provided.” 1. Proposed Budget – A proposed budget shall be prepared by the City Manager with participation of all of the City’s Directors within the provision of the Charter and the 2030 Plan. a. The budget shall include four basic segments for review and evaluation: • Revenue • Personnel Costs • Operations and Maintenance Costs • Capital and other non-project Costs b. The budget review process will include City Council participation in the development of each segment and allow for resident participation in the process, and will allow for sufficient time to address policy and fiscal issues by the City Council. c. A copy of the proposed and approved budgets will be filed with the City Secretary when it is submitted to the City Council and will be available on the City’s website. 2. Adoption – Upon finalization of the budget appropriations, the City Council will hold a public hearing, and subsequently adopt by Ordinance the final budget as amended. The budget will be effective for the fiscal year beginning October 1st. The Annual Budget document will be submitted annually to the Government Finance Officers Association (GFOA) for evaluation and consideration for the Distinguished Budget Presentation Award. D. Balanced Budget – The goal of the City is to adopt and maintain a balanced operating budget using sustainable funding sources that are expected to continue to be available in subsequent fiscal years. Excess balances in operating funds from previous fiscal years shall remain in the fund in which they were appropriated until either such excess balances are proposed and adopted pursuant to Section III. C. Preparation of this policy; until they are used to reduce outstanding debt obligations of the City; or both. The Charter (Section 6.04) requires that an operating deficit created in any fiscal year shall be paid off and discharged during the following year. In practice, deficit has been interpreted to mean City funds as a whole. The City Council may choose from time to time to allow individual funds to have a negative balance as long as Operating Reserve requirements for the City as a whole are maintained. E. Planning – The budget process will be coordinated so that major policy issues are identified prior to the budget approval date. This will allow City Council adequate time for consideration of appropriate decisions and analysis of financial impacts. Page 196 of 223 FY2021 Annual Budget F. Reporting – Summary financial reports will be presented to the City Council quarterly. These reports will be in a format appropriate to enable the City Council to understand the overall budget and financial status. G. Control and Accountability – Each Director, appointed by the City Manager, will be responsible for the administration of his/her departmental budget. This includes accomplishing the Goals and Objectives adopted as part of the budget and monitoring each department budget for revenue collections and compliance with spending limitations. Directors may transfer funds up to $25,000 within the operations and maintenance or capital line items within a departmental budget category with approval from Finance. All transfers from or to the Personnel line items require approval of the Finance Director and City Manager. All other transfers of appropriation or budget amendments require either City Council or City Manager approval as outlined in Section III.G Budget Amendments and Section V.C.4 Use of Excess Salary Savings. H. Budget Amendments – The Charter (Section 6.04) and the Local Government Code 102.009 and 102.010 provide a method to amend the budget for emergency appropriations and municipal purposes. The City Council may authorize, with a majority plus one vote, an amendment to the original budget. This may be done in cases of grave public necessity, or to meet an unusual and unforeseen condition that was not known at the time the budget was adopted. The following criteria will be used in evaluation of budget amendments: • Is the request necessary? • Why was the item not budgeted in the normal budget process? • Why can't a transfer be done within the Division to remedy the condition? The Finance Director must certify availability of revenues or funding sources prior to adoption. If needed, the City will amend the budget at year end for increased revenue and for expenditures that exceeded budgeted amounts. The City may also amend the budget for any capital project timing adjustments from prior year, as well as any other known adjustments needed and approved at that time. I. Contingency Appropriations – The budget may include contingency appropriations within designated operating department budgets. These funds are used to offset expenditures for unexpected maintenance or other unanticipated expenses that might occur during the year. Currently, the City maintains contingency appropriations for items such as insurance deductibles, unexpected legal expenses and equipment repairs. J. Use of Unanticipated and Unappropriated General Fund Balances – Within 90 days after fiscal year end, staff will report the projected General Fund balance to Council. In the event that unexpected, unbudgeted amounts are determined to be available in the General Fund after year end, these funds may be used for any of the following purposes, as approved by the City Council: 1. to fund capital projects; 2. to fund equipment purchases in lieu of issuing debt; 3. to reduce outstanding City debt, including bonded indebtedness and unfunded pension liabilities; 4. to fund contingent liabilities such as the benefit payout reserve, cemetery trust fund, and similar obligations of the City; Page 197 of 223 FY2021 Annual Budget 5. to take other steps to reduce property tax rates or mitigate any future increases; 6. to hold those funds in reserve for future commitments or contingencies that may be pending, and/or; 7. to fund an Economic Stability Reserve of annual General Fund operating expenditures according to Section XV, A, 2, b, Economic Stability Reserve. IV. REVENUE MANAGEMENT A. Characteristics – The City will strive for the following optimum characteristics in its revenue system: 1. Simplicity – The City, where possible and without sacrificing accuracy, will strive to keep the revenue system simple in order to reduce compliance costs for the taxpayer or service recipient. 2. Certainty – A knowledge and understanding of revenue sources increases the reliability of the revenue system. The City will understand its revenue sources and enact consistent collection policies to provide assurances that the revenue base will materialize according to budget. 3. Equity – The City shall make every effort to maintain equity in its revenue system; i.e., the City should seek to minimize or eliminate all forms of subsidization between entities, funds, services, utilities, and customer classes, and ensure an on-going return on investment for the City. a. The City will make every effort to recognize the benefit that City tax payers contribute to City programs and services. b. The annual Recreation residential membership rates are established at 75% of non-residential rates plus or minus 10% at the discretion of the Parks and Recreation Director in keeping with the targeted market cost recovery. 4. Revenue Adequacy – The City should require there be a balance in the revenue system; i.e., the revenue base will have the characteristics of fairness and neutrality as it applies to cost of service, willingness to pay, and ability to pay. Overall Operational Cost Recovery for Recreation is targeted to be between 50 – 60%, with some variance in individual programs. 5. Realistic and Conservative Estimates – Revenues will be estimated realistically, and conservatively, taking into account the volatile nature of various revenue streams. 6. Administration – The benefits of a revenue source should exceed the cost of levying and collecting that revenue. 7. Diversification and Stability – A diversified revenue system with a stable source of income shall be maintained. This will help avoid instabilities in revenue sources due to factors such as fluctuations in the economy and variations in the weather. Page 198 of 223 FY2021 Annual Budget B. Other Considerations – The following considerations and issues will guide the City in its revenue policies concerning specific sources of funds: 1. Cost/Benefit of Incentives for Economic Development – The City will use due caution in the analysis of any incentives that are used to encourage development. A cost/benefit (fiscal impact) analysis will be performed as part of the evaluation. 2. Non-Recurring Revenues – One-time or non-recurring revenues should not be used to finance current ongoing operations. 3. Sustainable Revenues – Sustainable means revenue that is consistently available year after year, and includes revenues realized subsequent to adopted projections. 4. Property Tax Revenues – Annually, the City will forecast property tax revenue as part of the budget process. Certified Assessed Value Reports from the Williamson Central Appraisal District are used to forecast property tax. The City will comply with State law regarding publication notices and Truth in Taxation requirements. 5. Interest Income – Interest earned from investments will be distributed to the funds in accordance with the average daily cash balance of the fund from which the monies were provided to be invested. 6. User-Based Fees and Service Charges – For services associated with a user fee or charge, the direct or indirect costs of that service will be offset by a fee where possible. The City will review fees and charges no less than once every five years on a rotating schedule to ensure that fees provide adequate coverage for the cost of services. The City Council will determine how much of the cost of a service should be recovered by fees and charges. 7. Enterprise Activity Rates – The City will review and adopt utility and airport rates as needed to generate revenues required to fully cover operating expenses, meet the legal requirements of all applicable bond covenants, and provide for an adequate level of working capital. Enterprise rates will be reviewed annually as part of the budget process. A rate study will be conducted every 3 years to review rate methodology and ensure revenues will meet future needs. All enterprise rates will be based on standardized cost of service methodologies and conservation goals. a. Water Rates will recognize at least 75% of the fixed cost of service, including debt payments and ROI costs, within the monthly base charge determined by meter size. Volumetric charge will recognize the balance of fixed costs not included in the base rate, plus all variable costs associated with procuring and treating water. . b. Wastewater Rates are fixed for all residential customers based on the cost of providing services. Commercial customer rates are fixed and volumetric depending on size and specifications of each commercial customer. c. Electric Rates include 100% of fixed costs within the base rate, and demand rates, with all variable costs included in the kWh rate. The Power Cost Adjustment (PCA) Factor and Transmission Cost Adjustment (TCA) Factor are determined by comparing forecasted costs against actual costs in a budget year, and seek to recover/credit variances within 6 to 12 months. For reference, see Code of Ordinances 13.04.075 and 13.04.080. Page 199 of 223 FY2021 Annual Budget d. Stormwater Drainage Fees are based on a mathematical calculation using impervious cover and applied in compliance with State Law. e. Solid Waste and Environmental Services Rates are based on the wholesale cost of service and retail incentives for conservation, plus a return to the General Fund for wear and tear of heavy trucks on City streets, a franchise fee, and an administrative allocation for managing the solid waste contract and solid waste departmental programing. f. Airport Fuel and Lease Rates are based on the cost of the fuel plus a profit margin to fund operations, capital improvement, contingency, and debt service requirements. 8. Internal Cost Recovery Fees – Additionally, enterprise activity rates will include transfers to and receive credits from other funds as follows: a. General and Administrative Charges – Administrative costs should be charged to all funds for services of general overhead, such as administration, finance, customer billing, legal and other costs as appropriate. These charges will be determined through an indirect cost allocation following accepted practices and procedures and reviewed annually by the City’s external auditors. b. Payment for Return on Investment – The intent of this transfer is to provide a benefit to the citizens for the ownership of the various utility operations they own. For all utilities except for Electric: • In-Lieu-of-Franchise-Fee. This transfer, currently 3% of operating revenues generated inside the City, is consistent with the franchise rates charged to investor owned utilities franchised to operate within the City. • Return on Investment. The return on investment (ROI) transfer for In-City utility customers is currently calculated at 7% of operating revenues for all non-electric utilities. ROI for water and sewer customers outside the City is 10% of operating revenues. The Franchise and Return on Investment for the Electric Utility are both derived from the base monthly charge gross revenue and kWh sold. For customers inside the City, the franchise fee is $0.002947/kWh sold, and the Return on Investment is 7% of gross revenue of the base monthly charge, and $0.007253/kWh sold. For customers outside the City, there is no franchise fee to the City of Georgetown; however, those customers may be subject to franchise fees in the jurisdiction in which they reside. Outside the City customers are charged a Return on Investment equal to 7% of gross revenue of the base monthly charge, and $0.0102/kWh sold. 9. Revenue Monitoring – Received revenues will be regularly compared to budgeted revenues and variances will be investigated, and any abnormalities will be included in the quarterly report to the City Council. 10. Other Funding Alternatives When at all possible, the City will research alternative funding opportunities prior to issuing debt or increasing user-related fees. Page 200 of 223 FY2021 Annual Budget a. Grants – All grant applications must be approved by the City Council prior to being submitted to a granting agency. Prior to submittal to Council, departments will verify that the benefits of the grant exceed the cost of grant administration and will also provide the required grant forms to Finance for review in accordance with the Grant Acquisition, Management, and Compliance Policy. Finance will review and sign the forms which provides detailed information including, but not limited to, the term of the grant, any matching requirements, the resulting operational requirements once the grant is discontinued, and a budget request detailing the line items to be effected, all of which should be included in the Council agenda item packet requesting approval to apply. The City Council must also authorize acceptance of any grant awards received. b. Use of Reserve Funds – The City may authorize the use of reserve funds to potentially delay or eliminate a proposed bond issue. This may occur due to higher than anticipated fund balances in prior years, thus eliminating or reducing the need for debt proceeds, or postpone a bond issue until market conditions are more beneficial or timing of the related capital improvements does not correspond with the planned bond issue. Reserve funds used in this manner are replenished upon issuance of the proposed debt. c. Developer Contributions – The City will require developers who negatively impact the City's utility capital plans offset those impacts. These policies are further defined within the City's utility line extension policy and other development regulations. d. Leases – The City may authorize the use of lease financing for certain operating equipment when it is determined that the cost benefit of such an arrangement is advantageous to the City. e. Impact Fees – The City will impose impact fees as allowable under state law for both water and wastewater services. These fees will be calculated in accordance with statute and reviewed at least every three years. All fees collected will fund projects identified within the Fee study and as required by state laws. V. EXPENDITURE MANAGEMENT A. Appropriations – The point of budget control is at the department level budget for all funds. The Charter (Section 6.03) provides that any transfer of appropriation between funds must be approved by the City Council and that the City Manager, without City Council approval, is authorized to transfer appropriations among departments, within the same operational division and fund. B. Expenditure Monitoring – Expenditures and encumbrances will be regularly compared to budget, variances will be investigated, and any abnormalities will be included in the quarterly report to the City Council. Projected year-end expenditures will be reported in the annual budget. C. Personnel Costs – Costs related to salaries and benefits are budgeted at 100% total costs, assuming open positions are filled throughout the fiscal year. New positions that are added during the budget process may have staggered hire dates with appropriate costs reflected in the budget. 1. Vacancy Factor – Major Funds with Personnel Budgets will include a vacancy factor of at least 1% of total fund salaries and related benefits (retirement, FICA, Medicare) to offset salary savings within the budget. The vacancy factor will be budgeted as a negative expense within the fund. This factor Page 201 of 223 FY2021 Annual Budget will be reduced throughout the year as vacant positions are recognized within the department budget. Compliance Status – General Fund, Electric Fund, Water Fund and Joint Services Fund FY2021 in compliance. 2. Benefit Payout Reserve – The City will establish a benefit payout reserve equal to 15% of the accrued benefit liability for employees in the General and Joint Services Funds who are currently eligible to retire. Only terminating employee benefit expenses may be paid from this reserve. This reserve shall be funded as an offset to the vacancy factor. Compliance Status – Benefit payout reserve FY20 21 in compliance. 3. Position Control – The annual budget includes a set number of positions within departments when approved and adopted by City Council. Additional positions cannot be added without approval of the City Council. The City Manager may approve the transfer of authorized positions between departments if funds are available within the department. 4. Use of Excess Salary Savings – Departmental savings generated due to open positions or other salary line item savings cannot be spent by the department unless previously approved by the City Manager and validated by Finance as excess funds. D. Special Purpose Funding – In order to support community assistance programs, the City designates specific funding for special purposes, including Social Services, Children’s Programs, and Public Art. The City reserves the ability to cap this special purpose funding when necessitated by budget contingency or compliance issues, such as revenue shortfalls, or other reasons as determined by City Council. 1. Strategic Partnerships for Community Services – The City of Georgetown values partnerships with organizations that are committed to addressing our communities’ greatest public challenges and has identified key priorities in the following areas: a. Public Safety b. Transportation c. Housing d. Parks & Recreation e. Veteran Services f. Safety Net The City has targeted funding for these programs to be $5.00 per capita, which may be adjusted to offset the effects of general inflation based upon Consumer Price Index. If previous funding levels are higher than the targeted amount, and to avoid significant reductions in levels of funding, the City Council shall seek to attain this target chiefly through population growth. These funds will be allocated and paid according to the City Council’s guidelines for such programs. Compliance Status – FY2021 in compliance. Page 202 of 223 FY2021 Annual Budget 2. Public Art Funding – The City will annually allocate $43,000 of funding for Public Art in the Tourism Fund. Any unspent funds will accumulate and be reallocated in the following budget year. Disbursement of these funds will be determined by the City’s Arts & Culture Advisory Board. Compliance Status – FY2021 in compliance. Every effort will be made to include public art funding in future City facilities whose primary purpose is for public use. These projects will include a reasonable allowance for public art that fits the scope and purpose of the building so long that it does not negatively impact the project cost beyond the original budget. In the event there is cost savings in the construction of City Facilities, the City Council may consider utilizing that savings on the purchase of public art for the facility. E. Purchasing – The City will maintain and regularly review written Purchasing Policies. All City purchases of goods or services will be made in accordance with the City’s Charter, current Purchasing Policy and with State law. The following table shows a summary of requirements for purchases of goods and services and does not substitute the formal Purchasing Policies. Dollar Limits: Procurements: Requirements: $3,000 and less Under the small purchase limit No competitive bids and City credit cards may be used. $3,001 up to $50,000 Within informal bid limit A minimum of three informal competitive bids required unless exempted; Historically Underutilized Business (HUB) requirements apply in accordance with state law. $50,001 and above In excess of the informal bid limit Formal solicitations, which includes public notices, required unless exempted. Advisory board review and recommendation may be required. Council approval required. Common exemptions to the formal solicitation process include the procurement of professional services, the purchase of goods or services from a sole source provider, and purchases for public health emergencies. In addition to the above, all purchases must be approved according to signature authority limits. F. Contracts, Change Orders and Amendments – Contracts and related change orders and amendments must follow the City’s Purchasing Policies and State Law. Contract term lengths should balance the need for value as well as the ability to respond to changing conditions. G. Prompt Payment – In accordance with State Law, all invoices approved for payment by the proper City authorities shall be paid within thirty (30) calendar days of receipt of goods or services or invoice date, whichever is later in accordance with State law. The City will take advantage of all purchase discounts, when possible. Page 203 of 223 FY2021 Annual Budget H. Risk Management – The City will pursue every opportunity to provide for the Public’s and City employees’ safety and to manage its risks. The goal shall be to minimize the risk of loss of resources through liability claims with an emphasis on safety programs. I. Retirement Benefits – Proposals to revise benefits administered and provided by the Texas Municipal Retirement System shall include a written description, and, detailed and summary numerical assessments of the changes that would result from the proposed benefit revision. 1. The numerical assessments shall include the following: a. The estimated change to the TMRS contribution rate that would result from the proposed change in benefits, expressed as a percentage of employee pay and as an annual dollar amount to the General Fund and to each City fund. b. The estimated change to the City’s unfunded pension liability, expressed as a dollar amount. c. The estimated change to the City’s actuarial funding ratio. 2. The description and numerical assessments must be provided to the City Council at least 72 hours prior to consideration and approval, and must be read aloud to the Council prior to Council consideration. 3. The estimated changes to the City’s contribution rate and the unfunded pension liability presented pursuant to the section must be based on information provided by the TMRS actuary or by a professional actuary authorized by the TMRS to provide such information. 4. Proposals to revise TMRS benefits must be voted on individually as part of the City Council’s legislative agenda. 5. The City will amortize any unfunded actuarial liability (UAAL) over a period not to exceed the amortization period used by the TMRS actuary. The City may amortize its UAAL more quickly by making contributions to TMRS in excess of the rate specified by TMRS. 6. The City may elect to pay a higher contribution rate than required by the TMRS, to reduce the City’s unfunded pension liability. Such payment will be approved and authorized by the City Council as part of the City's annual budget process. J. Retirement Cost-of-Living Adjustment 1. Within 60 days of when the TMRS annual funding update becomes available each year, staff will review and may prepare a summary of costs and options for potential cost-of-living adjustment (COLA) for City of Georgetown retirees. 2. Consistent with state statutes governing the Texas Municipal Retirement System, the City may provide an automatic COLA for members of the TMRS who are retired from the City of Georgetown and receiving a monthly retirement benefit from the TMRS. Page 204 of 223 FY2021 Annual Budget 3. The City Council may adjust the COLA provided to city retirees based upon the funding level of the City’s pension plan, as calculated by the TMRS, as follows: When the funding level of the City’s pension plan is The COLA should be Less than 70.0% Zero 70.0% to 79.9% 0.3% of CPI 80.0% to 89.9% 0.5% of CPI 90.0% and greater 0.7% of CPI 4. Adjustments made pursuant to Subsection J.3. should reflect the reciprocal effect of the prospective change in the COLA on the funding level of the City’s pension plan. K. Deferred Compensation Benefits – In addition to the retirement benefit administered by the TMRS, the City will sponsor a Deferred Compensation 457 plan, which is a supplementary individual retirement savings plan. The City will encourage employee participation in this plan. VI. STAFFING AND COMPENSATION City Council and Management recognize the importance of attracting, hiring, developing, and retaining the best people, and compensating them for the value they create. Our outstanding and innovative City employees work diligently to bring the Vision of Council to life and deliver exceptional services to our customers while exemplifying our Core Values. The following programs are subject to available funding in the annual operating budget. A. Adequate Staffing – Staffing levels will be adequate for the fiscal functions of the City to operate effectively. Workload allocation alternatives will be explored before adding additional staff. B. Competitive Compensation – In order to maintain a competitive pay scale, the City has implemented a Competitive Employee Compensation Maintenance Program to address competitive market factors and other issues impacting compensation. The program consists of: 1. Annual Pay Plan Review – To ensure the City’s pay system is accurate and competitive within the market, the City will review its pay plans annually for any potential market adjustments necessary to maintain the City’s competitive pay plans. 2. Pay for Performance – Each year the City will fund performance based pay adjustments for regular non-public safety personnel. This merit-based program aids in retaining quality employees by rewarding their performance. Pay for Performance adjustments are based on the employee’s most recently completed performance evaluation. Page 205 of 223 FY2021 Annual Budget 3. Public Safety Steps – Each year the City will fund anniversary step increases for public safety sworn personnel consistent with public safety pay scale design. C. Self-Insurance Program – The City is committed to providing quality healthcare insurance that offers the most flexibility in health benefits and options to its employees. In order to provide the most cost effective solution, the City has determined that establishing a self-funded health insurance plan offers the greatest opportunity to mitigate future cost increases while offering quality health care services to its employees. The City has established a mechanism to manage the accounts and payments associated with this program. Per GASB Statement No. 66, such funding should be accounted for as an Internal Service Fund (ISF). 1. Employee Health Insurance ISF – This fund contains premium contributions from employees and budgeted health insurance contributions included in the City’s annual budget process. To maintain stable revenue to this fund, and to clearly set expenditure expectations for departments, any budgeted appropriations for employee health insurance that are unused at the end of each fiscal year will be transferred back to the self-insurance fund. 2. Self-Insurance Reserves – Annually through the budget process, staff and the City’s Health Benefit Consultant firm will evaluate and recommend to Council the appropriate funding levels for two reserves. a. Incurred but Not Reported (IBNR) Reserve: In the event the City stopped self-insuring for health benefits and was required to pay incurred costs, the City will reserve between 5 and 10 percent of the annual costs of claims, benefit administration and stop loss coverage. Compliance Status – IBNR reserve FY2021 in compliance. b. Rate Stabilization Reserve: To alleviate shocks to the City and employees due to sharp increases in health insurance costs, the City will reserve between 10 and 20 percent of annual medical claims, benefit administration and stop loss coverage. Staff and the benefits consultant will consider a 3 year forecast on premiums when determining to utilize the funds or rebuild the reserve. Compliance Status – Rate stabilization reserve FY2021 in compliance. 3. Employee Premiums – Annual premiums will be recommended to City Council through a collaborative process between the City’s Employee Benefit Committee and external Health Benefits consulting firm using historical data, reserves history and other analytic analysis. VII. FUND BALANCE POLICIES The City’s Fund Balance is the accumulated difference between assets and liabilities within governmental funds, and it allows the City to meet its contractual obligations, fund disaster or emergency costs, provide cash flow for timing purposes and fund non-recurring expenses appropriated by City Council. This policy establishes limitations on the purposes for which Fund Balances can be used in accordance with Governmental Accounting Standards Board (GASB) Statement Number 54. The City’s Fund Balance will report up to five components: Page 206 of 223 FY2021 Annual Budget A. Non-spendable Fund Balance – includes inherently non-spendable assets that will never convert to cash, as well as assets that will not convert to cash soon enough to affect the current financial period. Assets included in this category are prepaid items, inventory and non-financial assets held for resale. B. Restricted Fund Balance – represents the portion of fund balance that is subject to legal restrictions, such as grants or hotel/motel tax and bond proceeds. C. Committed Fund Balance – describes the portion of fund balance that is constrained by limitations that the City Council has imposed upon itself, and remains binding unless the City Council removes the limitation. D. Assigned Fund Balance – is that portion of fund balance that reflects the City’s intended use of the resource and is established in a less formal method by the City for that designated purpose. E. Unassigned Fund Balance – represents funds that cannot be properly classified in one of the other four categories. VIII. LONG-TERM LIABILITY RESERVES The City of Georgetown recognizes certain long-term unfunded commitments and contingencies that will require substantial funding at some point in the future. The City is committed to addressing these commitments in a fiscally prudent method by acknowledging their future financial impacts and developing strategies and designated reserve funds to mitigate those future impacts. A. The Finance Director will maintain a list of unfunded liabilities. The list will be included in the quarterly financial report to Council and considered during the annual budget process. IX. BUDGET CONTINGENCY PLAN This policy is designed to establish general guidelines for managing revenue shortfalls resulting from local and national economic downturns that adversely affect the City's revenue streams. A. Immediate Action – Once a budgetary shortfall is projected, the City Manager will take the necessary actions to offset any revenue shortfall with a reduction in current expenses. The City Manager may: 1. Freeze all new hire and vacant positions except those deemed to be a necessity. 2. Review all planned capital expenditures. 3. Delay all "non-essential" spending or equipment replacement purchases. The City Manager shall report in a timely manner to the City Council the projected shortfall and the actions taken to resolve it. B. Further Action – If the actions identified in subsection A are insufficient to offset the projected revenue deficit for the current fiscal year, the City Council may approve the following actions, in the order listed: 1. Apply unspent, unobligated surplus funds from prior fiscal years to fund one-time costs in the current fiscal year budget. 2. Authorize the use of the General Fund Economic Stability Reserve , contingency reserves, capital reserves or any other reserves appropriate as outlined in the sections XII. CAPITAL MAINTENANCE AND REPLACEMENT and XV. FINANCIAL CONDITIONS, RESERVES, AND STABILITY RATIOS 3. Direct other reductions in services, including workforce reductions. Page 207 of 223 FY2021 Annual Budget 4. Authorize a temporary reduction in one or more fund’s contingency reserves from 90 days to 75 days. C. Replenish Fund Balance – Generally, if any existing reserve is used as described above in the budget contingency plan, the reserve should be restored in the next fiscal year. If the restoration within one year is impractical or places and undo strain of City services, staff shall recommend to Council an alternative timeline that is subject to Council approval. X. CAPITAL IMPROVEMENT PROGRAM (CIP) BUDGET The City’s goal is to maintain City facilities and infrastructure in order to provide excellent services to the customers within the community, meet growth related needs, and comply with all state and federal regulations. A. Preparation – The City annually updates and adopts a five-year Capital Improvement Program (CIP) schedule as part of the operating budget adoption process. The plan is reviewed and adjusted annually as needed, and year one is adopted as the current year capital budget. The capital budget will include all capital projects, capital resources, and estimated operational impacts. 1. Needed capital improvements are identified through system models, repair and maintenance records and growth demands. 2. A team approach will be used to prioritize CIP projects, whereby City staff from all operational areas provide input and ideas relating to each project and its effect on operations. 3. Citizen involvement and participation will be solicited in formulating the capital budget through master planning processes, board meetings, public hearings and other forums. 4. Capital infrastructure necessary to meet the requirements of the City’s Annexation Plan will be identified separately within the CIP plan, so that funding alternatives can be developed if needed. Prior to Council approval, the following Advisory Boards will review the Capital Projects budget and contracts for expenditures: Electric Utility Board Water Utility Board Georgetown Transportation Advisory Board (GTAB) General Government and Finance Advisory Board (GGAF) Parks Advisory Board Georgetown Transportation Enhancement Corporation (GTEC) Electric Water Wastewater Streets Stormwater Drainage Airport Facilities, Fleet, IT and Other General Government Capital Projects Parks and Recreation Transportation projects related to economic development Page 208 of 223 FY2021 Annual Budget B. Control – All capital project expenditures must be appropriated in the capital budget. C. Financing Programs – Where applicable, assessments, impact fees, pro rata charges, or other fees should be used to fund capital projects which have a primary benefit to specific identifiable property owners. Debt financing is referenced in Section XIV. Debt Management of this document. XI. CAPITAL MAINTENANCE AND REPLACEMENT The City recognizes that deferred maintenance increases future capital costs. Therefore, a portion of all individual funds with infrastructure should be budgeted each year to maintain the quality within each system. A. Infrastructure Maintenance — On-going maintenance and major repair costs are included as expense within the departmental operating budgets. These costs are generally considered system repairs and are not capitalized for accounting purposes. They include such items as park and recreation facility repairs, street repair, water line repairs and other general system maintenance. B. Modified Approach — Pavement Condition Index (PCI) — Governmental Accounting Standards Board Statement # 34 provides for an alternative approach to depreciation for measuring the value of infrastructure assets and the related costs incurred to maintain their service life at a locally established minimum standard. The City has elected to implement this modified approach in maintaining its non-enterprise fund infrastructure assets. In order to adopt this alternative method, the City has implemented an asset management system that determines if the minimum standards are being maintained. This measurement system will be updated at least every 3 years. The City uses a Pavement Management Information System to track the condition levels of each of the street sections. The condition of the pavement is based on the following factors: • Type of Distress • Amount of Distress • Severity of Distress • Deduct Values (function of first three) The Pavement Condition Index (PCI) is a measurement scale is based upon a condition index ranging from zero for a failed pavement to 100 for pavement with perfect condition. The condition index is used to classify pavement in the following conditions: The City’s administrative policy is to achieve an average PCI level of 85. An 85 PCI is considered maintaining the streets in a “good” condition. Staff will prepare a street maintenance budget that meets this target for Council’s consideration during the budget process. The PCI level as of 2018 was 85.5. PCI Rating 100 – 85 Good 85 – 45 Fair 45 – 0 Poor Page 209 of 223 FY2021 Annual Budget C. Internal Service Funds Capital Maintenance & Replacement – The City currently utilizes internal service funds to maintain and replace existing assets. Assessments are made to other funds for the use of existing equipment and to purchase new equipment. In this way, suitable funds are available for the purchase of operational assets without the issuance of debt. 1. Fleet Maintenance and Replacement – The City has a major investment in its fleet of cars, trucks, tractors, and other equipment. The City will anticipate replacing existing equipment, as necessary and will establish charges that are assigned to the using departments to account for the cost of that replacement. Vehicle maintenance is also allocated in this manner. The targeted asset replacement reserve amount is the average (1/5th) of the next five years on the replacement schedule for cash- funded vehicles. Compliance Status – Fleet replacement reserve FY2021 in compliance. It is the general policy of the City not to hold back vehicles or equipment from replacement or disposition. Departmental requests to hold back units must be approved by the Fleet Manager and the City Manager. 2. Technology – It is the policy of the City to plan and fund the maintenance and replacement of its computer network and other technology systems. A reserve will be established within the ISF for replacement of major systems and will be funded over time through excess revenues within the Fund. The targeted amount is the average (1/5th) of the next five years on the replacement schedule. While cash funding is preferred, major IT systems and projects may require debt that is amortized over a shorter useful life appropriate for the software or hardware. Compliance Status – IT replacement reserve FY2021 in partial compliance. The IT Fund will need to increase recovery rates in future years to cover the purchase of the fiber asset from the Electric Fund. 3. Facilities Maintenance – The City has established an on-going maintenance program, which includes major repairs, equipment, as well as contracts for maintaining City facilities. The City has anticipated a useful life of such equipment and established a means of charging those costs to the various departments in order to recognize the City’s continuing costs of maintaining its facilities. Determination for facility repairs is based on useful life of the various elements of each facility. A proportional cost for each element is expensed within the budget for capital replacement. The targeted replacement reserve amount is the average (1/5th) of the next five years on the replacement schedule. Compliance Status – Facilities replacement reserve FY2021 partial compliance. Due to the economic impacts of the pandemic, the City has elected not to increase recovery rates to build the reserve to compliance. It is estimated to take 2 additional years to build the replacement reserve. D. Departmental Capital Maintenance & Replacement – The City also utilizes department capital maintenance and replacement schedules for specialized assets and equipment necessary to provide services. 1. Parks and Recreation – As part of the City’s on-going maintenance program, the City also recognizes the need to regularly maintain and replace playgrounds, equipment and facilities that are part of the City’s Parks and Recreation system. Separate replacement and maintenance schedules will be maintained for these items including, but not limited to, playground equipment, buildings, sport courts, trees and grounds, and restroom facilities. The City’s goal is to provide level on-going funding Page 210 of 223 FY2021 Annual Budget to ensure safe, well-maintained facilities for its citizens. The current funding level is an annual $297,000 transfer from the General Fund. Compliance Status – Parks maintenance replacement FY2021 in partial compliance. Due to the economic impacts of the pandemic, the General Fund is transferring $50,000. 2. Public Safety Equipment – As part of the City’s on-going maintenance program, the City also recognizes the need to regularly maintain and replace specialized equipment in Police and Fire. Separate replacement and maintenance schedules will be maintained for these items including but not limited to for Fire: SCBA’s and other firefighting equipment and protective gear; and for Police: bullet proof vests, armaments and other tactical equipment. The City’s goal is to provide level on- going funding to ensure proper protection for employees and residents. The current funding level is an annual appropriation in the General Fund of $80,000 for Fire and $88,000 for Police. Compliance Status – Public safety equipment replacement FY2021 in partial compliance. Due to the economic impacts of the pandemic, reductions were made to General Fund base budgets including public safety equipment. E. Surplus Property 1. From time to time it is necessary to dispose of certain vehicles or equipment that have been procured with City funds and used in City services. Individual surplus property items with expected sales value in excess of $50,000 must be approved by the City Council prior to disposition. 2. City staff will maintain reports and records of all surplus property dispositions in accordance with good internal controls. XII. ACCOUNTING, AUDITING, AND FINANCIAL REPORTING A. Accounting – The City is solely responsible for the recording and reporting of its financial affairs, both internally and externally. The Finance Director is responsible for establishing the structure for the City’s Chart of Accounts and for assuring that procedures are in place to properly record financial transactions and report the City’s financial position. B. General Government and Finance Advisory Board (GGAF) – The City may establish a subcommittee consisting of at least 2 City Council members and not more than 3 citizens that may meet monthly to provide additional oversight to the City’s Finance operations. This subcommittee will also review general government items that are not reviewed by another City advisory board before being presented to City Council. The City’s Finance Director will be the liaison for this subcommittee. C. Audit of Accounts – In accordance with the Charter, an independent audit of the City accounts will be performed every year. The auditor is retained by and is accountable directly to the City Council. The auditing firm will serve for up to 5 years, at which time, the City will re-bid these services and change firms if deemed necessary by GGAF and City Council. D. External Reporting – Upon completion and acceptance of the annual audit by the City’s auditors, the City shall prepare a written Comprehensive Annual Financial Report (CAFR) which shall be presented to the City Council within 180 calendar days of the City’s fiscal year end. The CAFR shall be prepared in accordance with Page 211 of 223 FY2021 Annual Budget Generally Accepted Accounting Principles (GAAP) and shall be presented annually to the Government Finance Officer Association (GFOA) for evaluation and consideration for the Certificate of Achievement in Financial Reporting. XIII. ASSET MANAGEMENT A. Cash Management and Investments – The City Council has formally approved a separate Investment Policy for the City of Georgetown that meets the requirements of the Public Funds Investment Act (PFIA), Section 2256 and 2257 of the Texas Local Government Code. This policy is reviewed annually by the City Council and applies to all financial assets held by the City and applies to all entities (component units) included in the City’s Comprehensive Annual Financial Report (CAFR) and/or managed by the City. Refer to the separate policy for details regarding: 1. Statement of Cash Management Philosophy 2. Objectives 3. Safekeeping and Custody 4. Standard of Care and Reporting 5. Investment Strategies 6. Authorized Investments and Approved Broker/Dealer List. B. Fixed Assets – These assets will be reasonably safeguarded and properly accounted for, and prudently insured. 1. Capitalization Criteria – For purposes of budgeting and accounting classification, the following criteria must be met in order to be capitalized: a. The asset owned by the City b. The expected useful life of the asset must be longer than one year, or extend the life of an identifiable existing asset by more than one year c. The original cost of the asset must be at least $5,000 d. The asset must be tangible, or uniquely intangible like a trademark. On-going repairs and general maintenance are not capitalized. Public Education and Government (PEG) Funds will capitalize assets in aggregate over $1,000 on an annual basis. 2. New Purchases – All costs associated with bringing the asset into working order will be capitalized as part of the asset cost. This will include startup costs, engineering or consultant type fees as part of the asset cost once the decision or commitment to purchase the asset is made. The cost of land acquired should include all related costs associated with its purchase. 3. Improvements and Replacement – Improvements will be capitalized when they extend the original life of an asset or when they make the asset more valuable than it was originally. The replacement Page 212 of 223 FY2021 Annual Budget of assets components will normally be expensed unless they are a significant nature and meet all the capitalization criteria. 4. Contributed Capital – Infrastructure assets received from developers or as a result of annexation will be recorded as equity contributions when they are received. 5. Distributions Systems – All costs associated with public domain assets, such as streets and utility distribution lines will be capitalized in accordance with the capitalization policy. Costs should include engineering, construction and other related costs including right of way acquisition. 6. Reporting and Inventory – The Finance Division will maintain the permanent records of the City’s fixed assets, including description, cost, department of responsibility, date of acquisition, depreciation and expected useful life. Periodically, random sampling at the department level will be performed to inventory fixed assets assigned to that department. Responsibility for safeguarding the City’s fixed assets lies with the department supervisor or manager whose department has been assigned the asset. XIV. DEBT MANAGEMENT The City of Georgetown recognizes the primary purpose of capital facilities is to provide services to the community. Using debt financing to meet the capital needs of the community must be evaluated according to efficiency and equity. Efficiency must be evaluated to determine the highest rate of return for a given investment of resources. Equity is resolved by determining who should pay for the cost of capital improvements. In meeting demand for additional services, the City will strive to balance the needs between debt financing and “pay as you go” methods. The City realizes that failure to meet the demands of growth may inhibit its continued economic viability, but also realizes that too much debt may have detrimental effects on the City’s long-range financial condition. The City will issue debt only for the purpose of acquiring or constructing capital assets for the general benefit of its citizens and to allow it to fulfill its various purposes as a city. The City will seek input on major projects funded with debt via bond elections, master planning exercises, board meetings, budget workshops, and other methods as needed. A Debt Condition Update report will be provided annually. A. Usage of Debt – Long-term debt financing will be considered for non-continuous capital improvements of which future citizens will benefit. Alternatives for financing will be explored prior to debt issuance and include, but not limited to: • Grants • Use of Reserve Funds • Use of Current Revenues • Contributions from developers and others • Leases • Impact Fees When the City utilizes long-term financing, it will ensure that the debt is soundly financed by conservatively projecting revenue sources that will be used to pay the debt. It will not finance the improvement over a Page 213 of 223 FY2021 Annual Budget period greater than the useful life of the improvement and it will determine that the cost benefit of the improvement, including interest costs, is positive to the community. The City may utilize the benefits of short-term debt financing to purchase operating equipment provided the debt doesn’t extend past the useful life of the asset and the potential impact to the tax rate is within policy guidelines. Page 214 of 223 FY2021 Annual Budget B. Types of Debt 1. General Obligation Bonds (GO’s) – General obligation bonds must be authorized by a vote of the citizens of Georgetown. They are used only to fund capital assets of the general government and are not to be used to fund operating needs of the City. The City’s ad valorem taxing authority backs general obligation bonds. Conditions for issuance of general obligation debt include: a. When the project will have a significant impact on the tax rate; b. When the project may be controversial even though it is routine in nature; or c. When the project falls outside the normal bounds of projects the City has typically done. For debt programs that include multiple projects that will be issued over multiple years at the discretion of the City Council, the City may approve an Agreement with the Voters to manage future property tax rate impacts. The Agreement with the Voters will be included in educational information for all applicable GO Bond elections, and will include a maximum annual tax rate increase and a cumulative total per bond authorization maximum tax rate increase. The City will include these impacts in its annual Debt Condition report. The City Council will carefully manage the unissued GO Bond authorization through annual review of related projects to ensure full disclosure on future timing of projects included in the bond package. Timing of authorized projects and related bond issuance will be included in the Annual Budget and published on the City’s website. Any changes to this schedule require specific Council authorization. 2. Revenue Bonds – Revenue bonds will be issued to provide for the capital needs of any activities where the capital requirements are necessary for the continuation or expansion of a service. The improved activity shall produce a revenue stream to fund the debt service requirements of the necessary improvement to provide service expansion. The average life of the obligation should not exceed the useful life of the asset(s) to be funded by the bond issue, and will generally be limited to no more than twenty (20) years. An exception can be made for plant expansions or related system expansions whose useful life is in excess of 30 years. A cost benefit analysis will be done to fully disclose the impacts of extending debt beyond 20 years. 3. Certificates of Obligation, Contract Obligations (CO’s) – Certificates of obligation or contract obligations may be used to fund capital requirements that are not otherwise funded by general obligation or revenue bonds. Debt service for CO’s may be either from general revenues (tax- supported) or supported by a specific revenue stream(s) or a combination of both. Typically, the City may issue CO’s when the following conditions are met: a. When the proposed debt will have minimal impact on future effective property tax rates; b. When the projects to be funded are within the normal bounds of City capital requirements, such as for roads, parks, various infrastructure and City facilities and equipment; and c. When the average life of the obligation does not exceed the useful life of the asset(s) to be funded by the issue. Certificates of obligation will be the least preferred method of financing and will be used with prudent care and judgment by the City Council during the budget development process. Page 215 of 223 FY2021 Annual Budget 4. Self-supporting Certificates of Obligation Debt – Refers to certificates of obligation issued for a specific purpose and repaid through dedicated revenues other than ad valorem taxes. The annual debt requirements are not included in the property tax calculation. Both the Airport and Stormwater Drainage funds will issue this type of debt. In addition, the Electric and Water Services Funds can utilize this method of funding non-system capital assets. The City also issues debt on behalf of the Georgetown Transportation Enhancement Corporation (GTEC) and the Georgetown Economic Development Corporation (GEDCO) whom then pledge 4A and 4B sales tax revenue for the repayment of that debt. Tax Increment Reinvestment Zones also may issue self-supporting debt. 5. Internal borrowing between City Funds – The City Council can authorize use of existing long-term reserves as loans between funds. The borrowing fund will repay the loan at a rate consistent with current market conditions. The loan will be repaid within ten (10) years. The loan will be considered an investment of working capital reserves by the lending fund. 6. Other Short-term Borrowing – The City may authorize the issuance of Public Property Finance Contractual Obligations (PPFCO) which is short-term obligations for the acquisition of personal public property, such as equipment. PPFCOs are payable from either ad valorem taxes or another dedicated revenue stream. Each issuance will be assessed to ensure cost effectiveness and the repayment schedule will not exceed the useful life of the asset. Multiple equipment acquisitions can be grouped in a single PPFCO issue in order to develop economies of scale. C. Method of Sale – The City will use a competitive bidding process in the sale of bonds unless conditions in the bond market or the nature of the issue warrant a negotiated bid or other method. In such situations, the City will publicly present the reasons for the other method. The City will rely on the recommendation of the financial advisor in the selection of the underwriter or direct purchaser. The financial advisor must meet all licensing requirements and comply with all Municipal Securities Rulemaking Board (MSRB) regulations. The City’s financial advisor will not act as the underwriter on any City bond issue. D. Disclosure – Full disclosure of operating costs along with capital costs will be made to the bond rating agencies and other users of financial information. The City staff, with assistance of the financial advisor and bond counsel, will prepare the necessary materials for presentation to the rating agencies and will aid in the production of the Preliminary Official Statements. The City will take responsibility for the accuracy of all financial information released. E. Federal Requirements – The City will maintain written procedures to follow post issuance compliance rules, arbitrage rebate and other Federal requirements. 1. Post issuance tax compliance rules will include records retention, arbitrage rebate, use of proceeds, and 2. Continuing disclosure requirements under SEC Rule 15c2-12, MSRB standards, or as may be required by bond covenants or related agreements. F. Debt Structuring – The City will issue bonds with an average life of twenty (20) years or less, not to exceed the useful life of the asset acquired. The structure should approximate level debt service unless operational matters dictate otherwise. Market factors, such as the effects of tax-exempt designations, the cost of early redemption options and the like, will be given consideration during the structuring of long term debt instruments. Exceptions to the 20 year average life include debt issues for major system expansions, such as Page 216 of 223 FY2021 Annual Budget water, sewer or electric plants, in which case the City may issue debt greater than 20 years since the average life of the asset exceeds 30 years. A cost benefit analysis indicating the impacts of extending debt beyond 20 years will be completed. G. Utility and Self-Supporting Debt Coverage Ratio – Refers to the number of times all utility supported debt service requirements or payments would be covered by the current operating revenues net of on-going operating expenses of the City’s combined utilities (Electric, Water, and Wastewater). The City will maintain a minimum debt service coverage ratio of 1.5 times for the utilities as a whole. The bond ordinances allow the City to forego a debt reserve fund for its utility debt if the coverage is maintained at 1.35 times or better. A coverage ratio of 1.5 times will also be required for all funds issuing self-supporting debt (Airport, Stormwater, GTEC, GEDCO, and TIRZ). Compliance Status – Debt coverage ratio FY2021 in compliance. H. Bond Reimbursement Resolutions – The City may utilize bond reimbursements as a tool to manage its debt issues, due to arbitrage requirements and project timing. In so doing, the City uses its capital reserve cash to delay bond issues until such time when issuance is favorable and beneficial to the City. The City Council may authorize a bond reimbursement resolution for General Capital projects that have a direct impact on the City's ad valorem tax rate when the bonds will be issued within the term of the existing City Council. In the event of unexpected circumstances that delay the timing of projects, or market conditions that prohibit financially sound debt issuance, the approved project can be postponed and considered by a future council until circumstantial issues can be resolved. The City Council may also authorize revenue bond reimbursements for approved utility and other self- supporting capital projects within legislative limits. Currently revenue bonds must be issued within 18 months after an eligible bond funded project is begun. The total outstanding bond reimbursements may not exceed the total amount of the City’s reserve funds. XV. FINANCIAL CONDITIONS, RESERVES, AND STABILITY RATIOS The City of Georgetown will maintain budgeted minimum reserves in the ending working capital/fund balances to provide a secure, healthy financial base for the City in the event of a natural disaster or other emergency, allow stability of City operations should revenues fall short of budgeted projections and provide available resources to implement budgeted expenditures without regard to actual timing of cash flows into the City. Generally, if any existing reserve is used to cover expenses as described, the reserve should be restored in the next fiscal year. If the restoration within one year is impractical or places and undo strain of City services, staff shall recommend to Council an alternative timeline that is subject to Council approval. A. Operational Coverage – The City’s goal is to maintain operations coverage of 1.0 (one), such that operating revenues will at least equal or exceed current operating expenditures. Deferrals, short-term loans, or one- time sources will be avoided as budget balancing techniques. Reserves will be used only for emergencies or non-recurring expenditures, except when balances can be reduced because their levels exceed guideline minimums as stated below. Page 217 of 223 FY2021 Annual Budget 1. Operating Reserves – The City will maintain reserves at a minimum of seventy-five (75) days (20.83%) of net budgeted operating expenditures. Net budgeted operating expenditure is defined as total budgeted expenditures less interfund transfers and charges, capital improvements, direct cost for purchased power, debt service, non-operating special revenue funds and payments to third party grant agents. The amount of these funds are allocated within the following operating funds and using the following guidelines to maintain the fund balance, working capital and retained earnings (reserves) of the various operating funds at levels sufficient to protect the City’s creditworthiness, as well as, its financial position from unforeseeable emergencies. For asset replacement reserves, see Section XI. Capital Maintenance and Replacement. Compliance Status – 75 day citywide reserves FY2021 in compliance. 2. General Fund – General Fund reserves will be assigned on the balance sheet. Reserves are allocated as follows: a. Base Level Reserve – will equal ninety (90) days, or 25%, of current year budgeted operating expenditures designated for emergency use only. Compliance Status – General Fund 90 day Reserve FY2021 in compliance. b. Economic Stability Reserve – will equal up to 6% of current year budgeted operating expenditures. The reserve will be designated to temporarily offset a decline in any General Fund revenue source during the current fiscal year or in planning the future budget year. The reserve may be used when growth in any General Fund revenue source from one fiscal year to the next is below zero. The reserve will be available to support only existing programs approved in a prior fiscal year. Compliance Status – General Fund Stability Reserve FY2021 at 3%. 3. Tourism Fund – A minimum ninety (90) days of operating expenditures will be reserved within the fund balance. These funds are designated to be used to offset any potential revenue shortfall that occurs during the fiscal year. Compliance Status – Tourism Fund Reserve FY2021 in compliance. 4. Joint Services Fund – A minimum ninety (90) days of operating expenses will be reserved for unexpected delays in revenue or emergency expenses. Compliance Status – Joint Services Fund Reserve FY2021 partia l compliance. Due to the economic impact of the pandemic, the City is not increasing recovery rates to build this reserve. It is estimated to take approximately 3 years to build the reserve to 90 days. 5. Fleet Fund – A minimum ninety (90) days of operating expenses will be reserved for unexpected delays in revenue or emergency expenses. Compliance Status – Fleet Fund Reserve FY2021 in compliance. 6. Facilities Fund - A minimum ninety (90) days of operating expenses will be reserved for unexpected delays in revenue or emergency expenses. Page 218 of 223 FY2021 Annual Budget Compliance Status – Facilities Fund Reserve FY2021 in compliance. 7. Information Technology Fund - A minimum ninety (90) days of operating expenses will be reserved for unexpected delays in revenue or emergency expenses. Compliance Status – IT Fund Reserve FY2021 in compliance. 8. Water Services Fund – The Water Fund will maintain the following reserves and assign them on the balance sheet. These reserves are designated to be used to offset potential revenue shortfalls or fund unexpected or emergency expenses that occur during the fiscal year. a. Operations Contingency Reserve – A minimum ninety (90) days or 25% of operating expenses, including wholesale water contracts and net of transfers, designated for unexpected or emergency use during the fiscal year. Compliance Status – Operating Water Fund Reserve FY2021 in compliance. b. Non-Operating Contingency Reserve – to maintain continuity of debt payments, capital projects and to begin recovering from a natural disaster during the lag time of revenue recovery. This reserve will be evaluated annually as part of the budget process, considering the 5 year CIP and future debt requirements. Compliance Status – Non-operating Water Fund Reserve FY2021 in compliance. 9. Stormwater Drainage Fund – The Stormwater Fund will maintain the following reserves and assign them on the balance sheet: a. A minimum ninety (90) days or 25% of operating expenses, will be reserved in fund balance. These funds are designated to be used to offset any potential revenue shortfall that occurs during the fiscal year. Compliance Status – Contingency Reserve FY2021 in compliance. b. A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale). Compliance Status – Debt Service Reserve FY2021 in compliance. 10. Electric Fund – The Electric Fund will maintain the following reserves and assign them on the balance sheet: a. Operations Contingency Reserve – A minimum ninety (90) days or 25% of operating expenses, net of transfers and purchased power, designated for unexpected or emergency use during the fiscal year. Compliance Status – Operating Contingency reserve FY2021 in compliance. Page 219 of 223 FY2021 Annual Budget b. Rate Stabilization Reserve – Up to 10% of purchased power costs will be reserved to protect against energy market exposure and to maintain wholesale power contracts and stability until expenses are recovered through revenue generated in the Power Cost Adjustment Factor. Compliance Status – Rate stabilization reserve FY2021 in compliance. c. Non-Operating Contingency Reserve – to maintain continuity and begin recovery process from a natural disaster during the lag time of revenue recovery: • 1% of historical rate base (total assets plus accumulated depreciation) • 1/5th of the average cash funded portion of the 5 year CIP • At least 50% of annual debt service payment Compliance Status – Non-operating reserve FY2021 in partial compliance. It is estimated to take 1 years to complete this reserve after enacting the new cost of service rate structure and PCA. d. Uses of Unanticipated and Unappropriated Electric Fund Balances – In the event that fund balance in the Electric Fund exceeds recommended minimum cash as enumerated in the above reserves, the funds may be used for the following purposes as approved by the City Council: • Reduce the Power Cost Adjustment • Reduce outstanding utility debt • Fund capital projects • Fund other one-time projects or equipment 11. Airport Fund – The Airport Fund will maintain the following reserves and assign them on the balance sheet; a. A contingency reserve of ninety (90) days of operating expenses will be maintained in the fund for unforeseen or emergency expenditures. The reserve will represent all operating expenses minus fuel costs and any transfers.. Compliance Status – Contingency Reserve FY2021 in compliance. b. A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale). Compliance Status – Debt Service Reserve FY2021 in compliance. 12. GEDCO Fund – a. A contingency reserve equal to 25% of budgeted sales tax revenue. Compliance Status – Contingency Reserve FY2021 in compliance. b. A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale). Compliance Status – Debt Service Reserve FY2021 in compliance. Page 220 of 223 FY2021 Annual Budget 13. GTEC Fund – a. A contingency reserve equal to 25% of budgeted sales tax revenue. Compliance Status – Contingency Reserve FY2021 in compliance. b. A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale). Compliance Status – Debt Service Reserve FY2021 in compliance. 14. Rivery TIRZ Fund – A debt service reserve equal to 1x the upcoming debt service payment for existing debt (example - FY2020 reserve = FY2021 debt payment before new sale). Compliance Status – Debt Service Reserve FY2021 in compliance. 15. Cemetery Fund – A perpetual reserve should build over time so that interest earnings can offset annual operational costs. The General Fund makes an annual transfer of $75,000 to this fund. Compliance Status – In FY2021 not in compliance. Due to the economic impact of the pandemic, the General Fund is transferring $35,000. The reserve has $560,000. Annual operational costs are $100,000. With an interest rate of 2%, the reserve needs a balance of $5 million to support operations. This fund is not likely to build this level of reserve without a significant change in revenue. For all other funds, the fund balance is an indication of the balance of each particular fund at a specific time. The ultimate goal of each such fund is to have expended the fund balance at the conclusion of the activity for which the fund was established. Reserve requirements will be calculated as part of the annual budget process and any additional required funds to be added to the reserve balances will be appropriated within the budget. Funds in excess of the minimum reserves within each fund may be expended for City purposes at the will of the City Council once it has been determined that use of the excess will not endanger reserve requirements in future years. This action requires an amendment to the City’s Annual Budget and is outlined in Section III. J. Use of Unanticipated and Unappropriated General Fund Balances. B. Liabilities and Receivables – Procedures will be followed to maximize discounts and reduce penalties offered by creditors. Current liabilities will be paid within 30 days of receiving the invoice. Accounts Receivable procedures will target collection for a maximum of 90 days of service. The Finance Director is authorized to write-off non-collectible, non-utility accounts that are delinquent for more than 180 days, and utility accounts delinquent more than 180 days, provided proper delinquency procedures have been followed, and include this information in the Comprehensive Annual Financial Report to the City Council. C. Capital Project Funds – Every effort will be made for all monies within the Capital Project Funds to be expended in a timely manner preferably within thirty-six (36) months of receipt. Due to the long timeline of some projects, unused cash or bond proceeds will be reserved on the fund schedule and appropriated when needed. The fund balance will be invested and income generated will offset increases in construction costs or other costs associated with the project. Capital project funds are intended to be expended totally, with any unexpected excess to be approved for use according to the bond covenant and opinion of bond counsel. Page 221 of 223 FY2021 Annual Budget D. General Debt Service Funds – Revenues within this fund are stable, based on property tax revenues. Balances are maintained to meet contingencies and to make certain that the next year’s debt service payments may be met in a timely manner. Fund balance should not fall below 45 days annual debt service requirements, in accordance with IRS guidelines. Compliance Status – Debt Fund Reserve FY2021 in compliance. E. Investment of Reserve Funds – The reserve funds will be invested in accordance with the City’s investment policy. F. Ratios/Trend Analysis – Ratios and significant balances will be incorporated into the quarterly financial reports to the City Council for the Electric, Water and General Debt Service Funds. This information will provide users with meaningful data to identify major trends of the City's financial condition through analytical procedures. The following ratios/balances will be used as key financial indicators: • Debt Ratio: Current liabilities plus long-term liabilities divided by total assets CL +LTL/TA AL < 0.5 • Times Coverage Ratio: Operating revenue less operating expense divided by annual debt service (OR-OE)/DSV AL > 1.5 The City will develop minimum/maximum levels for the above ratios/balances through analyzing of City historical trends and future projections. XVI. RISK MANAGEMENT AND INTERNAL CONTROLS A. Written Procedures – Wherever possible, written procedures will be established and maintained by the Finance Director for all functions involving cash handling and/or accounting throughout the City. These procedures will embrace the general concepts of fiscal responsibility set forth in this policy statement. B. Internal Audit Program – An internal audit program will be maintained by the Finance Director to ensure compliance with City policies and procedures and to prevent the potential for fraud. 1. Departmental Audits – departmental processes will be reviewed to ensure dual control of City assets and identify the opportunity for fraud potential, as well as, to ensure that departmental internal procedures are documented and updated as needed. 2. Employees or Transaction Review – Programs to be audited include Petty Cash, City Credit Card accounts, time entry, and travel. All discrepancies will be identified, and the employee’s Director will be notified. The City Manager will also be notified depending on the seriousness of the infraction. Page 222 of 223 FY2021 Annual Budget 3. Fraud Awareness and Reporting – The City will maintain its personnel policy regarding fraud. The will maintain an arrangement with a third party for anonymous reporting of fraud, waste or abuse of City resources. The City will provide training to all City employees on recognizing and reporting fraud. 4. The Finance Director and City Manager will present an annual audit plan to the General Government and Finance board. Results of all internal audits will be provided to the GGAF and City Council at year-end. C. Directors Responsibility – Each Director is responsible for ensuring that good internal controls are followed throughout their department, that all Finance Division directives are implemented and that all independent auditor internal control recommendations are addressed. Departments will develop and periodically update written internal control procedures. D. Cybersecurity – The Information Technology department shall regularly assess new forms of security risk and maintain multiple layers of protections and controls to thwart cyber attacks. The City will provide regular cybersecurity awareness training for all employees. E. Electric Utility Risk – Chapter 13.38 of the City’s Code of Ordinances establishes Council’s authority to oversee all risk of the Electric utility including CRR auctions, wholesale power agreements, futures contracts, and other transactions that expose the City to significant risk. Page 223 of 223