07-22-1992 (City Council) Agenda Packet eil0A/LaVIL) Of2(a< ..% CCU ,/,
WYLIE WATER SYSTEM NEEDS
PRIORITY LIST OF IMPROVEMENTS
FISCAL YEAR 1991 - 1992
1 . Upgrade pump controls "Telemetry" $- lO 000 under
construction
2. Paint Steel Road Storage Tank and remove
dirt from base of tank to prevent corrosion. $ 23, 000
I , 4
3. Paint Nortex Storage Tank �,�� t1)( tit
Ut2 `Vag- $ 34, 00
----� �
4. Replace 25 fire hydrants around old section $ 45, 000
of town.
5. Install 3, 300 l . f . of 8" water lines to fill
existing gaps in system. $ 80, 000
6. Install 7, 500 I . f . of 12" water lines to fill **
existing gaps in system. $225, 000
7. Set up maintenance schedule for all valves. (No cost)
8. Set up maintenance schedule for all fire
hydrants. (No cost)
TOTAL $417, 000
* Example streets: JACKSON, FIRST, OAK, SECOND, & MASTERS
** Example streets: BROWN, ALANIS, STONE, McMILLAN (Southfork M.H.P.)
FM 544 (Steel Rd. System)
Wattt bos5
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Hice P/L6,61-16,1,(tez,f ,
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NEWPORT HARBOR WATER PRESSURE SOLUTIONS
Existing System Upgrade
Option 1 : Booster Pump Station (F. M. 1378) $ 43, 375
Option 2: Ground Storage Reservoir and
Pump Station (Newport Harbor ) $176, 760
Option 3: Nortex Pump Station - Back Pressure
Sustaining Valve & Pump Controls $ 37, 812 *
Option 4: 8" Loop Line ( 11 , 500 l . f . ) $207, 625
Wylie Northeast WSC Agreement
Option 1 : 8" Tie-in ( 1 , 900 1 . f. ) $ 43, 080
Option 2: 12" Tie- in ( 1 , 900 1 . f . ) $ 71 , 760
LEGAL DESCRIPTION APPRAISED VALUE/ APPRAISED VALUE/ APPRAISED VALUE/ APPRAISED VALUE/ CURRENT APPRAISED ANNUAL DOLLAR
AT.5125 TAX RATE AT.555 TAX RATE AT.6150 TAX RATE AT.6150 TAX RATE VALUE DIFFERENCE
1988-89 1989-90 1990-91 1991-92 W/615.,.635,.655
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Quail Hollow#1 22,000.00 13,500.00 10,000.00 10,000.00 10,000.00 1
Blk. F.,Lot 13 122.10 83.03 61.50 61.50 .615-61.50 -
.635-63.50 2.00
.655=65.50 4.00
Pointe North#2 18,000.00 91,970.00 87,498.00 87,498.00 92,398.00
Blk. C., Lot 13 92.25 510.43 538.11 538.11 .615=568.25 -
.635-586.73 18.48
.655-605.21 36.96
Point North#1 99,314.00 96,815.00 82,706.00 82,706.00 82,018.00
Blk. L.,Lot 13 508.98 537.32 508.64 508.64 .615-504.41 -
.635-520.81 16.40
.655-537.22 32.80
Wyndham Est. #1 71,307.00 69,858.00 66,133.00 66,133.00 66,250.00
Blk.C.,Lot 2 365.45 387.71 406.72 406.72 .615-407.44 -
.635-420.69 13.25
.655-433.94 26.50
Meadows of Wylie 63,335.00 63,534.00 56,991.00 56,991.00 56,533.00
BIk. 1,Lot 19 324.59 352.61 350.49 350.49 .615-347.68 -
.635-358.98 11.30
.655-370.29 22.60 •
Trailsplace Addn. 20,000.00 20,000.00 20,000.00 18,000.00 18,000.00
BIk.A., Lot 13 102.50 111.00 123.00 110.70 .615- 110.70 -
.635- 114.30 3.60
.655- 117.90 7.20
Rush Creek#2 20,000.00 9,500.00 9,500.00 9,500.00 9,500.00
Blk. C.,Lot 13 102.50 58.43 58.43 58.43 .615-58.43 -
.635-60.33 1.90
.655=62.23 3.80
LEGAL DESCRIPTION APPRAISED VALUE/ APPRAISED VALUE/ APPRAISED VALUE/ APPRAISED VALUE/ CURRENT APPRAISED ANNUAL DOLLAR
AT.5125 TAX RATE AT.555 TAX RATE AT.6150 TAX RATE AT.6150 TAX RATE VALUE DIFFERENCE
1988-89 1989-90 1990-91 1991-92 W/615.,.635,.655
Rustic Oaks#3 100,031.00 106,283.00 94,742.00 91,925.00 90,523.00
BIk. B.,Lot 13 512.66 589.87 582.66 565.34 .615-556.72 -
.635-574.82 18.10
.655-592.93 36.20
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Oaks#4 74,683.00 73,106.00 66,522.00 66,522.00 68,644.00
Blk. B Lot 13 382.75 405.74 409.11 409.11 .615-422.16 -
.635-435.89 13.73
.655=449.62 27.46
Kinsington Manor#5 83,867.00 70,067.00 68,124.00 68,124.00 67,559.00
BIk A., Lot 1 429.82 388.87 418.96 418.96 .615-415.49 -
.635=429.00 13.51
.655-442.51 27.02
Westwind Meadows#2 93,180.00 85,427.00 82,949.00 82,949.00 82,229.00
BIk. I,Lot 25 477.55 474.12 510.14 510.14 .615-505.71 -
.635-522.15 16.44 I
.655-583.60 32.88
Oak#2 65,864.00 64,833.00 58,988.00 58,988.00 58,515.00
BIk. B.,Lot 13 337.55 359.82 362.78 362.78 .615-359.87 -
.635-371.57 11.70
.655=383.27 23.40
Rush Creek Est. 96,086.00 93,868.00 89,213.00 89,213.00 88,837.00
Blk. B, Lot 13 492.44 520.97 548.66 548.66 .615-546.35 -
.635-564.11 17.76
.655-581.88 35.52
Oaks#1 80,807.00 80,916.00 73,658.00 73,632.00 79,820.00
Blk. A,Lot 1 414.14 449.08 453.00 452.84 .615=490.89 -
.635-506.86 15.97
.655=522.82 31.94
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LEGAL DESCRIPTION APPRAISED VALUE/ APPRAISED VALUE/ APPRAISED VALUE/ APPRAISED VALUE/ CURRENT APPRAISED ANNUAL DOLLAR
AT.5125 TAX RATE AT.555 TAX RATE AT.6150 TAX RATE AT.6150 TAX RATE VALUE DIFFERENCE
1988-89 1989-90 1990-91 1991-92 W/615.,.635,.655
Wylwood Est.#3 78,007.00 76,178.00 74,006.00 71,057.00 67,753.00
Blk. 6,Lot 13 399.79 422.79 455.14 437.00 .615=416.68 -
.635=430.23 13.55
.655=443.78 27.10
Russell Addn. 25,527.00 23,906.00 23,503.00 23,495.00 23,302.00
Blk. 1,Lot 5 130.83 132.68 144.54 144.49 .615= 143.31 -
.635= 147.97 4.66
.655= 152.63 9.32
Railroad 52,379.00 48,849.00 47,513.00 51,264.00 50,825.00
Blk. 30,Lot 15 268.44 271.11 292.20 315.27 .615=312.57 -
.635=322.74 10.17
.655=332.90 20.34
Abstract 267,Lot 10 616,068.00 609,568.00 609,568.00 547,200.00 547,200.00
Davidson E. Survey 3,157.35 3,383.10 3,748.84 3,365.28 .615=3,365.28 -
.635-3,474.72 109.44
.655-3,584.16 218.88
COMMERICAL AND RESIDENTIAL,WATER RATES
EFFECTIVE EFFECTIVE EFFECTIVE CURRENT PROPOSED CURRENT / PROPOSED
10/01/88 11/01/90 03/01/91 07/01/92 NEW RATE
MONTHLY AVERAGE
# Of Customers 2,666
2,739 3,363 3,479
3,479
Base Rate 6.50
7.15 4. 84 4.84
7.15
0 - 1,000 gal. -
-
1,001 - 2,000 1.82
1.82 1. 82 1.82
1.82
2, 001 and up 2.40
2.55 2.55 2.55
2.55
Residential/Monthly - 57 718.91
(2921 Customers) 64,466.47 19.76 22.07
Commerical/Monthly - 3,716.20
(558 Customers) 3,716.20 6. 66 6.66
TOTAL MONTHLY 61,435.11 68,182.67
26.42 28.73
ANNUAL 737,221.32
818,192.04 317.04 344.76
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**Residential was figured on an average water consumption of 7, 140 gallons
figured on an average of 1, 525 gallons of water. Theof water;sameommeountl
sewer was also figured
consumption of water.
on the amount
z
SEWER RATE
EFFECTIVE EFFECTIVE EFFECTIVE CURRENT PROPOSED CURRENT / PROPOSED
10/01/88 11/01/90 03/01/91 07/01/92 RATES MONTHLY AVERAGE
*Residential
# of residential 2,921
Base Rate 7.00 10.00
10.00 10.00 8.50
0 - 1,000 gal. -
1,001 and up 1.20 1.45
1.45 1.45 1.45
Sewer Pass Thru 2.00 2.00
Up to 2,000 - -
Sewer Pass Thru 5.00 5.00
2,001 - 15,000 2.31 2.31 5.00
*Commerical
# of Commercial is 558
Base Rate 14.00 14.00
14.00 14.00 14.00
0 - 1,000 gal. -
1,001 and up 1.20
1.45 1.45 1.45 1.35
Sewer Pass Thru 7.50 7.50
4. 81 4.81 7.50
Residential Sewer/Monthl 55,206.90 50, 825.40
(2921 Customers) 18.90 17.40
Sewer Pass-Thru/Monthly 6,747.51 14, 605.00 2.31 5.00 '
Commercial 6,004.08 6,004.08
(558 Customers) 10.76 10.76
Sewer/Monthly
Sewer Pass Thru 2,683.98 4, 185.00
4.81 7.50
TOTAL MONTLY 70,642.47 75,619.48
36.78 40.66
ANNUAL 847,709.64 907,433.76 441.36 487.92
INCREASE IN COMBINED SERVICES - GENERAL FUND
$2,500 Tuition Reimbursement
Consolidation of postage
Ambulance contract
Telephone/911 - System
Dues -- TML, COG, etc DRMC
All General Fund Insurance/liability/property, etc.
All Electricity, Water, Gas
Sanitation contract
Animal Control contract
Conference Room Remodel
INCREASE IN COMBINES SERVICES -- UTILITY FUND
Consolidation of postage
Water purchases
Sewer services
- Right-of-Way/Utility relocations
Transfer to General Fund
MEMORANDUM
DATE: July 13 , 1992
TO: Mayor and City Council /111 ;,
FROM: Steve Norwood, City Manager ,0�
RE: Financial Overview
INTRODUCTION
This brief financial overview of the City of Wylie will
comprise of the following areas: General Fund Recap (Tax
Rate, Fund Balance, Revenue and Expenditures, Staffing,
Service Levels, Transfers, Debt) . I will address both
General Fund and Utility Fund and discuss both areas in
limited detail. I will also attempt to outline the major
policy issues facing both the General Fund and Utility Fund
over the next several years. By no means are the policy
issues all inclusive but I do hope that it will adequately
address some of the major issues facing this community. I
have put considerable thought in formulating this financial
overview. I hope the Council, as the primary policy makers
of the City, spend some time going through this and I hope
it raises other questions for staff to address.
FY91/92 BUDGET -- BRIEFING
At this point of the FY91/92 budget year I think the City is
in "fair" condition. As I communicated to Council at a
previous worksession, I feel that with a little luck that we
will see a slight increase in our fund balance. Had some
significant changes not been made, i.e. mid-year layoffs,
budget freezes and close financial scrutiny, it would have
been very possible to see our fund balance drop from a
$189,000 to roughly $50,000. I am predicting that our fund
balance will come in around $200,000 to $250,000. As I said
hopefully we will get a little luck for the remainder of the
year.
In the Utility Fund we are not as fortunate. The heavy
rainfalls have not helped our water sales. There again with
the high watering months just ahead and with some dry
weather we could possibly "break even" in our fund balance
(working capital) for this fund. Also in the Utility fund a
reorganization and mid-year budget freezes and layoffs
helped offset our dwindling revenues. For the remainder of
this fiscal year, any capital, i.e. , water/sewer line
replacement has been deferred due to a poor cash flow in our
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Utility fund. I do not feel that the Utility fund is in as
bad as shape as some of you may think. My real concern in
the Utility fund is the condition of the City's water and
sewer lines that are in dire need of replacement. However
this can be addressed with some bond money that is available
and staff will be coming to Council on a prioritization of
those dollars and projects.
FY92/93 BUDGET -- PREVIEW
As staff is in the midst of finalizing the 92/93 budget for
City Council's consideration one thing is definitely
apparent. There is not enough dollars to meet the City's
needs. The revenues are obviously remaining flat with a
slight increase in some areas but for the most part overall
revenues will be flat. As far as expenditures there will
always be a slight increase due to pay and benefits,
insurance increases, also inflation factors in the purchase
of goods and supplies.
The revenues for 1993 budget are approximately $2.9M.
During the budget process the staff requested expenditures
totaling $3.7M. Obviously we cannot afford a $800,000
increase in expenditures over revenues. I honestly feel
that the requests made by department directors were not
unreasonable. Some of their requests are very critical
needs while others are "would like to". It is my opinion
that staff is very much aware of the City's financial
condition and has done a good job in trying to keep that in
mind when addressing their budget needs. After going
through a series of budget cutting with directors it looks
as though the City of Wylie will have a true shortfall of
approximately $300,000 - $400,000 in revenues. Without
doubt there will be some very tough choices ahead of us
during the month of July in order to get a budget that we
can support.
The Utility fund I do not feel is in as bad shape as the
General fund. The recent reorganizations will have a
definite help for next year. We are also projecting
revenues to be basically flat and the expenditures will also
be in line. There will be some budget cuts needed in the
Utility fund but I do feel that the cuts will not have to be
near as significant as those in the General fund.
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A) GENERAL FUND RECAP
1) Tax Rates
1989 - .555
1990 - .615
1991 - .615
1992 - ?
For the past two years Wylie's tax rate has stayed the
same. From 1989 to 1990 the City saw a six cent
increase in the tax rate. Five of the cents were to
offset the cost of debt. A point to consider on our
tax rate is that a slow incremental tax rate increase
to our citizens maybe more palatable than keeping the
tax rate the same for several years then having a large
tax rate increase in the future. Obviously the City's
tax rate during the early to mid eighties did not
increase but by two or three cents over a period of
years but please remember that was during a period of
extremely high growth.
2) Fund Balance
1989 - $226,803
1990 - $406,054
1991 - $189,656
1992 - $200,000 (Estimated)
The above fund balance totals are ending fund balances
and are audited figures except for the 1992 estimate.
This fund balance is extremely important to the City of
Wylie. It should be roughly $400,000 to $500,000 at
all times. This is a minimum. The bond raters in New
York and also our financial advisors look at this
figure very closely. In fact we were asked and closely
scrutinized by the bond raters earlier this year as to
why our fund balance dropped so significantly over the
past year. The primary reason for the drop in fund
balance was expenditures of capital items that were not
budgeted. This fund balance is something that the
Council needs to address from a general policy
standpoint that we will try to increase our fund
balance to $400,000 over the next two to three years.
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3) Revenues
1989 - $2 ,315,048
1990 - $2 ,468,977
1991 - $2,490,796
1992 - $2 ,400,000 (Projected)
The above figures do not reflect utility fund
transfers. As I have stated numerous times to the City
Council our revenues have remained flat over the past
several years and I do not see this trend changing in
the next couple of years.
4) Expenditures
1989 - $1,996,744
1990 - $2,540, 264
1991 - $3 ,085,987
1992 - $3,083,659 (Budgeted)
As you can see expenditures have increased $1.1M over
these three years. These increases can be pointed to
the fact that we are providing a much higher level of
service and in some cases additional services that were
not being provided in 1989. To mention a few, City
Attorney, Fire, Parks and Recreation. During that
three year period an increase of $365,000 for streets
and $210,000 for police. So you take out police and
streets the increases over a three year period are not
as alarming.
5) Staffing
1989 - 43 .3
1990 - 47.8
1991 - 56. 3
1992 - 61.6
Keep in mind these staffing figures are for General
Fund only and also are based on full time equivalents,
meaning that school crossing guards, part time
librarians, etc. are included in these staffing totals.
As we get into next year's budget I will be breaking
these out separately to show City Council full time
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staffing and also part time staffing and not combine
the two.
The staffing totals for 1992 do not include the
positions eliminated in June.
6) Service Levels
Although I have no yearly data for service delivery to
our citizens as this will correspond with staffing
totals for the previous years. I can say that we are
providing a good basic level of service. The City has
moved forward by adding a Parks and Recreation staff
that has shown improvements to the maintaining and
development of Community park as well as other City
facilities. Also the implementation of a full time
paid Fire Department, in-house City Attorney, also by
the recruitment of a professional staff in engineering
and code enforcement, etc.
As our economy continues to be depressed and no major
relief in sight I think you will see our citizens
continue to demand a higher level of service. They
will also demand this higher level of service without
an increase in cost. Obviously it cannot be done
without increases, be it in taxes, user fees, or
downsizing. Also I have noticed in other cities that
the residents are using the parks, recreation and
library facilities even more during these recession
times. As some other cities have said the parks and
recreation is their "hometown retreat" . This is
basically due to the fact that citizen's disposal
incomes are decreasing and they are spending more time
with their families and obtaining entertainment through
their local parks and recreation programming.
I do not envy the Council in trying to balance the
service delivery needs and desires with the available
funds.
7) Transfers
1989 - $185,750
1990 - $309,500
1991 - $305,000
1992 - $300,000 (estimated)
These transfers listed are strictly for transfers
received by the General fund from the Utility fund.
These transfers are legal and ethical and bond raters
and advisors expect to see these transfers. They do
5
like to see cities address these transfers through some
sort of "policy" and that it is not done on a random
basis to address General fund needs solely. In other
words the bond raters do not like to see the cities
continue to increase their utility fund transfers to
the general fund because it indicates a City Council's
unwillingness to raise taxes to support that fund.
Also, the transfers are not meant to subsidize the
fund, either. Currently the city is transferring 15%,
this is not excessive or out of the ordinary. I would
say that we do not need to go any higher. At this
point I would recommend to the Council that we keep our
transfers at 15% and address any reductions in
transfers during the next budget year.
8) Debt
1989 - $486,386
1990 - $665,517
1991 - $605,260
1992 - $589,590
The City's debt rate is not excessively high but it
must definitely be monitored in the future, especially
with our property valuations being so low. Fortunately,
the debt the City issued has gone to eliminate some
state mandated problems.
9) Major Policy Issues -- General Fund
**Maintaining and Improving the Level of Service
**Ongoing Street Reconstruction and Improvement Program
**Fleet Replacement Program
**Computer Technology Upgrades
**Future Bond Election
**Highways 78 and 544
**Comprehensive Plan
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B) UTILITY FUND BRIEFING
The Utility fund has been hard hit the past couple of
years. Obviously due to the heavy rains. The past two
years have been the wettest in the area's history and
due to the agreement we have with North Texas it makes
it extremely difficult on the City to absorb these
losses. As most of you know we have we have what is
commonly called "take or pay" agreement with North
Texas as do the cities of Plano, Garland, Mesquite,
Richardson. Basically, even if you don't use it, you
are still obligated to pay. . Also during the last
couple of years the City has issued debt, therefore the
City's debt service has increased.
1) Utility Fund -- FY91/92
The Utility fund this past year, as I stated earlier,
suffered tremendously from a cash flow standpoint due
to the rains. However in responding to this reduction
in cash the City's reorganization at mid-year has
helped offset the decline in revenues. Freezing of
expenditures has also helped the Utility fund and
deferring capital expenditures, i.e. water and sewer
line replacements. With a little luck and some
continued dry weather I am expecting that the Utility
fund will break even or possibly only drop the fund
balance (or working capital) $50,000. Initially the
picture for the Utility fund was much worse. I do
think that the City can end the year in relative good
fashion considering the rainy weather.
2) Utility Fund -- FY92/93
For the most part I do not expect major changes in the
Utility fund for '92/93. We are going to be budgeting
the revenues flat and then hopefully we will have a
dry year and even exceed our revenue projections.
Statistically we cannot keep having one wet year after
another.
On the expenditure side I expect to see our
expenditures decrease with some moves in personnel and
other areas. Also there should be a slight drop in our
debt service payments but probably the brightest part
of the Utility fund for next year is the fact that we
will have some left over bond funds available that we
can use to correct any water or wastewater projects.
Paul Beaver has been working aggressively to secure a
state grant which would also give the City substantial
dollars in correcting our wastewater problems.
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3) Water Rates
The following water rates are based on the last three
changes to our rate structure:
10/01/88 Base Rate $6.50
1,001 - 2,000 $1.82 per 1,000 gallons
2 ,000 and up $2.40 per 1,000 gallons
11/01/90 Base Rate $7.15
1,001 - 2,000 $1.82 per 1,000 gallons
2,000 and up $2.55 per 1,000 gallons
03/01/91 Base Rate $4.84
1,001 - 2,000 $1.82 per 1,000 gallons
2,000 and up $2.55 per 1,000 gallons
The water rates have increased very nominally over the
past four years with the primary increase being in the
base rate. However, the lowering of the base rate to
$4.84 has definitely had an impact on the Utility fund.
This lowering of the base rate even lower than the rate
was in 1988 and also during that same time issuing
additional debt has caused the Utility fund to suffer.
The base rate of $4.84, as it is currently, generates
to the City approximately $195,000. Had the base rate
been lowered back to the 1988 rate of $6.50 it would
have generated in excess of $260,000. In other words
it is costing the City approximately $67,000 per year
on the base rate. Obviously I am not aware of the
politics and the community concerns with the water
rates in 1990 and 1991.
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4) Sewer Rates
10/01/88 Base Rate $7.00
1,000 and up $1.20 per 1,000 gallons
Sewer Pass Thru $2.00
up to 2,000 gallons
Sewer Pass Thru $5.00
2,001 - 15,000 gallons
11/01/90 Base Rate $10.00
1,000 and up $ 1.45 per 1,000 gallons
Sewer Pass Thru $ 2.00
up to 2,000 gallons
Sewer Pass Thru $ 5.00
2,001 - 15,000 gallons
03/01/91 Base Rate $10.84
1,000 and up $ 1.45 per 1,000 gallons
Sewer Pass Thru $ 0.00
up to 2,000 gallons
Sewer Pass Thru $ 2.31
2,001 - 15,000 gallons
Here again the City reduced the sewer pass thru rates
which is a guaranteed revenue amount and also during
that time additional debt being issued. Once again
the Utility fund suffered.
I realize that our water and sewer rates are on the
"high side" but there again sewer pass thru rates are
guaranteed incomes and are not subject to inclement
weather.
Next year I think all of us will have to take a very
close look at our water and wastewater rates in order
to help address some of the capital needs.
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5) Debt
1989 - $342 ,770
1990 - $427,716
1991 - $484, 200
1992 - $497,460
This increase in debt has obviously been to correct
some of the state mandated problems and others to the
issuance of debt. Fortunately the City is solving
those problems and hopefully we can see our debt start
leveling off or get back into an upgrading of our
infrastructure and not correcting state mandated
problems.
6) Staffing
1989 - 14
1990 - 14
1991 - 15
1992 - 16
These staffing levels have remained fairly constant
over the past four years. The 1992 staffing of sixteen
does not reflect the two positions that were eliminated
in the mid-year budget reorganization. So our Utility
fund has the same staffing as four years ago.
Although our staffing level is the same today as it was
in 1989 we have the seen the number of our water
customers increase from 2,666 to more than 3,400 so we
are having additional lines, customers and areas to
serve and maintain.
7) Revenues
1989 - $1,696,413
1990 - $1,887,905
1991 - $2,069,812
1992 - $1,800,000 (estimated)
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8) Expenditures
1989 - $1,530 ,652
1990 - $1,890,881
1991 - $1,708,867
1992 - $1,850,000 (estimated)
9) Major Policy Issues -- Utility Fund
**Continued Infrastructure Improvements on Water and
Wastewater lines
**Elevated Tank in Newport Harbor Area - Looping System
**Wastewater -- Lift Stations
**Wylie Northeast Water Supply Corporation and East
Fork Water Supply Corporation
**Regional Wastewater Plant -- Sachse, Murphy, Rowlett
**Downtown Area Water/Sewer Line Replacement
**Water and Wastewater Rate Structure
Fortunately the City has available resources with bond
money and possible grant money to correct a lot of
these problem areas. If the City does receive the
grant money we will have nearly $400,000 in which to
spend on water and wastewater system improvements. The
City is very fortunate to have these dollars and I
think we can correct a lot of problems that currently
effect us, i.e. water loss, infiltration, pressure,
etc. However, as you are well aware infrastructure
replacement and improvement is an on going process. We
can, however, solve a lot of these problems by using
these dollars. The Council is to be commended for
issuing that debt two years ago to correct a lot of the
wastewater, landfill and other problems in the City and
having enough left over to fund additional capital
projects. Furthermore by the issuance of that
additional debt our rates did not increase
substantially so therefore the citizens did not feel as
great an impact as they could have.
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Financial Concerns
Sales Tax
This is an extremely critical area to the City of Wylie
in that sales taxes are the second largest revenue
generator and they fluctuate with the economy. With
the City's one-half cent sales tax for economic
development it makes it doubly important that the City
look for business expansions and additions that are
sales tax driven. There again shifting the burden from
the residents to the businesses.
Property Taxes
Obviously this is the most critical area that faces
each City. Declining valuations and very modest
growth have left most cities financially strapped.
Expansion of the tax base is obviously very important
and hopefully that expansion can come from commercial
and industrial uses. The taxes generated off
industrial companies are far greater than that of
residents and typical require less service.
Areas to Watch
Parks and Recreation - I feel this is probably the one
area in the City that will be the most exciting to
watch over the next two to three years. I am expecting
great things to come in this area as we start expanding
into recreational opportunities and appealing to a much
larger percentage of our population than those that
strictly play sports. Also with the opening of the
Armory in August or September will give the City the
space to provide this programming. In the next couple
of months I will have Bill Nelson present to you some
of the plans of recreation programming that will be
starting in the first of '93 with a very expanded
program in the summer for the kids. This will be a
very exciting time and I think the Council will be
pleased with what will be taking place in '93.
Police and Fire - The exciting part about police and
fire will be the involvement in the community. This
involvement in the community does not require
additional staff or large capital expenditures. This
involvement will be through crime watch programs, fire
prevention, LETS program and a citizens police academy.
This City will be making strides to garner citizen
support of these two key areas.
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Finance - With the City Council approving a new
financial hardware/software system for the City the
benefits will be incredible. Financial reporting and
management reports that I will be receiving will aid
Council in making better informed policy decisions. We
will also improve staff productivity and efficiency.
The above departments and areas that I have mentioned
are the ones I feel are to be watched are the next two
to three years. This is centered on the fact of
providing a higher level of service and for the most
part not requiring additional staffing unless the
City's population grows substantially over the next
couple of years.
Obviously with reductions in staff comes reduction in
service delivery but I strongly feel that in the areas
of parks and recreation and also police and fire that
a higher level of service can be provided without that
additional cost.
Alternatives to Taxes
With property taxes being the City's primary revenue
generator and with the citizen sensitivity to increased
taxes leaves very few areas in which to expand. The
main area will be to expand in the commercial and
industrial area that will generate additional sales
taxes and property taxes.
Increase in Fees
It is very typical in local government for cities to
increase fees to help off set no tax rate increases.
With the majority of cities getting very nominal tax
rate increases cities are shifting to increase in fees
to help generate revenues. The City of Dallas recently
increased their traffic fines and other user fees to
help fund services. The City of Wylie is no different,
we will be looking at increasing our 911 fees and other
user fees to help generate additional dollars rather
than through major increases in our tax rate. However,
there is concern about user fees especially from many
citizen groups.
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SUMMARY
I hope this financial overview is of some help to you and
give you a flavor of where the City has been is going and
also outline some of the major policy issues facing this
community. By no means is this list all inclusive but it
does highlight some of the areas of Council concern and also
addresses both funds with a historical perspective. We are
all very confident that the City's future is bright but by
the same token we all realize there will be some bumps and
bruises along the way. The main point for all of us to
consider is to not sacrifice key future items due to
temporary budget problems. We must continue to look in the
future and move forward and try to provide a quality level
of service regardless of our tax rate and revenues.
Citizens will demand a higher level of service. Our
purpose for being in public service is to provide quality
service to our citizens. That delivery of service should be
staff's foremost goal and to do that by providing the
highest level of service at the lowest possible cost.
If you have any questions feel free to contact me. Also we
are still planning for our budget worksession to be on
Tuesday, July 21st and Wednesday, July 22nd. Most likely we
will cover the Utility fund on Tuesday as well as
Sanitation, Impact Fees, etc. and then on Wednesday night
cover the General Fund.
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- Aodo
ro-
/e
CITY OF' WYLIE
2000 HWY.78N.-P.O. BOX 428
WYLIE,TEXAS 75098
(214)442-2236 • FAX 442-4302
BUDGET MESSAGE
JULY 17 , 1992
TO: MAYOR AND CITY COUNCIL
Here is the Council's draft version of the 1992/93 budget
for the City of Wylie. The budget is strictly in a working
document and draft form. There are still some areas left for
minor "clean up" . However, this budget is pretty reflective of
what I am recommending for the 92/93 fiscal year.
This budget is based on a two cent tax increase which I will
be recommending. This nominal tax rate increase is reflective of
our lost valuation in May of nearly $10 ,000,000. In essence this
tax rate increase effectively will not generate any more tax
revenues for the City. Basically "get the City even" . Even more
distressing is on Thursday we learned that the final tax rolls
were released and our property tax valuations dropped another
$10,000,000. The tax rate increase of two cents will be sorely
needed even more so. However, should the Council choose not to
adjust the tax rate then staff will respond accordingly.
GENERAL FUND
The proposed general fund budget for next year is based on
revenues of approximately $3 ,000,000. As you will see these
revenue estimates are extremely conservative and hopefully with a
little good luck next year we can exceed these revenues instead
of lowering them as we did this year.
The expenditures in this budget are based on conservative
revenue estimates. I feel that the expenditures are extremely
tight and there is very little "pad" in this budget.
The primary items that are in the general fund budget are a
3% percent pay increase and a tuition reimbursement program for
employees, as well as an employee incentive and safety program
and additional dollars for training for all levels of employees.
I have said repeatedly, that my commitment is very strong for
the employees and that we need to make sure that the group of
employees we have representing the City feel that they are
operating safe equipment and are being trained effectively to
carry out their jobs more efficiently.
Other items of interest in the budget is a comprehensive
plan for the City, a Repair and Demolition fund, approximately
$130,000 for new street reconstruction, and a significant
increase in general maintenance of City streets, a new computer
hardware/software system for finance, citizen newsletter,
Citizens Police Academy, recreation programs and other items that
will be visible to citizens.
This budget is a very realistic and workable document.
Obviously there are items that I feel that the City needs to fund
but we are all aware of the economic times and must adjust
accordingly. Another good feature of this budget is the
implementation of a fleet replacement program to insure quality
equipment for employees in the future.
The general fund budget that is before you has a deficit of
which I will explain in our work session meetings, Tuesday and
Wednesday.
UTILITY FUND
The utility fund revenue is budgeted also extremely
conservative, however, with the last couple of years being
extremely wet it is very difficult to budget in these conditions.
The expenditures are also budgeted very conservatively and I
feel that as we have in the general fund, need to be cognizant of
the fund balance (working capital) . There is no rate increase
of any type included in the utility fund.
We recently received word from North Texas Municipal Water
District that our sewer cost for next year is going to increase
$8,000 and we are still waiting on word regarding our water
rates. Staff will closely review these cost increase(s) from
NTMWD and probably in August we will have solid data regarding
our rates. If the water rate increases Council may want to
consider our options prior to adopting the budget in September.
A major component of the utility fund budget will be the
fact that the City will have significant dollars remaining from
the closure of the landfill and also a possibility of receiving
$250,000 in grant revenues. These funds will allow the City to
do major water and wastewater improvements to our system.
Also I have put in the utility fund budget approximately
$100,000 for right-of-way/utility relocations for Highway 78.
This is extremely important as we pursue the highway department
and others that the City of Wylie is serious and committed to the
necessary funding for this project.
OTHER
Also in this budget we will be collapsing the sanitation
fund into the general fund and show sanitation as a franchise
like we do the electricity and telephone.
Another point to mention is that I hope the Council is
pleased with the financial reporting and documentation that you
are now receiving. I can assure you that I believe in full
disclosure and that the information will be presented very
accurately and honestly. However, I will make my recommendations
in certain areas but as I said this is our budget that we will be
presenting to our citizens. So it is very important that Council
knows not only my reasons for recommending but also what is in
the budget for the employees as well as the citizens.
After going through our budget work sessions we will then
formulate a final budget document to present to Council for
adoption and at that time I will submit a more detailed budget
memo with that document.