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Policy Development/Review Workshop - Call to order at 04:06 PM


A Texas Municipal Retirement System (TMRS) -- Keith Brainard, Councilmember District 3

With a Powerpoint presentation, Brainard said he has provided a handout to Council that documents the history and status of the Texas Municipal Retirement System (TMRS) with respect to the City of Georgetown. . He noted he has provided that document to the members of the TMRS SubCommittee, who are councilmembers Eason and Sattler.

Brainard said he does not want anything he says to be inferred as an indictment of city staff or the Texas Municipal Retirement System, as he believes all have acted in good faith. He reviewed key provisions of the City's current retirement benefit. He said TMRS allows its members to elect different levels of retirement benefits, and the City has elected the highest level of benefits in terms of the benefits provided to employees. He said, in 2001, the City adopted eligibility at any age at 20 years of service and also increased the employee contribution from 5% to 6%. He said, in 2002, the City switched its vesting from 10 years to 5 years. He said, in 2005, the City Manager proposed increasing the employee contribution from 6 to 7% of pay as well as establishing automatic cost of living adjustments for retirees. He said these changes were estimated at the time to cost an additional $300,000 annually. We now know that these changes cost much more than that, and that and these changes more than doubled the City's unfunded pension liability. He noted the changes in 2005 were requested chiefly by public safety personnel.

He said the City, for the first time ever, will not make its full TMRS contribution this year. He described the increase in the City's contribution rate over the past decade. He said TMRS treats public safety officers and general employees the same, which is very unusual in the public sector. He noted, in most jurisdictions, public safety officers are permitted to retire earlier than civilian employees. He said the City, over the past 15 years, has repeatedly improved its retirement benefits. He reviewed the various benefit enhancements over the last several years. He said the intention of these changes was to recruit and retain employees. He reviewed retirement statistics of surrounding Cities and Williamson County, and pointed out that several neighboring cities have TMRS benefit structures that are less generous than Georgetown’s. He said the City of Round Rock provides TMRS benefits that are nearly identical to the City of Georgetown, and that Round Rock’s funding condition is about the same as Georgetown’s.

Brainard said he is proposing the City revise its updated service credit provision from 100% to 50%. He reviewed the history of updated service credit as related to TMRS. He said the updated service credit increases the retirement benefit and value of the employees cash balance to treat the retirement benefit as if the employee has always been making his or her highest salary. He said the responsibility for this change lies solely with the City.

Oliver stated his understanding of updated service credits and said the credits convert this from a defined contribution program to a hybrid program which boosts prior credits to the current best three year salary. Brainard said TMRS was established truly as a hybrid plan with characteristics of both defined benefit and defined contribution plans, but that the adoption of updated service credit makes it more of a defined benefit plan. He noted the benefit is also dependent on the employee's age. He explained exactly how this plan works. Oliver asked and Brainard clarified which funds the City is responsible for. He said, during the last five 5 years, salary growth for police officers and firefighters has increased at an average annual rate of more than 9%. He said, when the salary increases are this large, the City's contribution grows as well. He showed Council an example of how moving to a 50% service credit would affect City employees. He estimated the annual savings from switching updated service credit from 100% to 50% at about 2.5% off the contribution rate, or $680,000 annually. He noted $450,000 of that savings would come from the General Fund. He said roughly 2/3 of the City's general fund budget goes toward personnel salaries and benefits. He noted the salary and benefit increases the City has made over the past few years is unsustainable. He said City General Fund revenue and spending is outpacing inflation and growth in resident income. He referred Council to a document which outlined the effect of switching the updated service credits from 100% to 50%. He said the numbers on those documents are based on 5% annual salary growth. He noted his proposal includes four motions and he reviewed those proposed motions.

Sattler asked and Brainard listed retirement statistics for employees who do not work in the public sector or the government. He noted fewer than 1 in 5 employees in the private sector have a defined benefit plan. Sattler asked and Brainard gave statistics on matching rates from the employer to the employee in most private sector jobs. The typical employer contribution rate to a defined contribution plan in the private sector is around three to five percent. Sansing asked and Brainard said he would like to see automatic enrollment in the supplemental 457 retirement plan for those hired after the end of this calendar year. Sansing asked and Rundell said TMRS does not allow the City to run two separate retirement plans. She said the City currently has one plan for all employees. Rundell said Brainard is correct in many ways and she explained how the City has been able to pay for the current benefits.

Sansing spoke about Social Security benefits and asked if it is possible, with TMRS, to do an estimated calculation that would take into account the lifetime earnings of employees, rather than only the last few years of their service. Brainard said that would be possible, but it would take a statutory change to TMRS. Sattler referred to the statistics from surrounding Cities and entities and asked how Georgetown compares to them. Brainard said Georgetown has maxed out in its benefit structure and the benefits can not be improved or enhanced. He said there are other Cities who have also maxed out like the City of Georgetown. Sattler asked and Brainard said he does not know how Georgetown salaries compare to the surrounding areas. Oliver said there are other ways to reduce the City's obligation, but Brainard chose to change the updated service credit. Oliver asked Brainard why he chose that change and Brainard said he tried to find a change that would make the least amount of immediate impact on the employee, and to give employees who would be affected time to adjust.

Oliver asked and Brainard said the monthly amount of an employee's retirement is dependent upon both a worker’s age as well as the cash balance. Brainard said, if the Council agrees on the 50% updated service credit, the City has the option to reestablish the 100% credit at any time. He said this is not a permanent change. Oliver reviewed the many parts of Brainard's proposed motions. Brainard said he would like to see more employees take advantage of the 457 plan retirement benefit. Eason said, in the sample given, some of the totals do not change when the service credit is reduced. David Rodriguez from Texas Municipal Retirement System clarified the sample sheet which was given to the Council. Rodriguez noted those employees with minimal changes probably have not had a substantial salary increase over the course of their career. He said TMRS can run projections if Council wants more examples. Mayor asked and Brainard said moving to the 50% updated service credit would reduce the unfunded liability by several million dollars.

Bills introduced the Housing Advisory Board Chair, Debbie Hoffman, who is the director of Habitat for Humanity of Williamson County. Hoffman described the history and role of the Housing Advisory Board. She said the Board's goal is to find an agreeable Housing Element for the 2030 Comprehensive Plan. She said, in coming up with the plan, the Board looked at the housing market and demographics of the City. She described the process of developing the Housing Element. Hoffman asked and Bills reviewed the Housing Element of the 2030 Plan. Bills went over the definition of a Housing Element . She said the 2030 Comprehensive Plan was adopted in 2008 with the Land Use Element. She said the next two elements are the Parks and Housing Elements. She said the Housing Element includes demographics, the housing market in Georgetown, affordable housing, and policy recommendations. She gave Council a timeline of the creation of the Housing Element. Mayor asked and Bills said the draft of the Housing Element which was given to Council in December has not changed. Bills said the area median income for a family of four in 2007 was a little over $71,000. She noted about 42% are single wage earning households. She said, in this process, the Board discovered that the affordable rental market is underserved. Bills spoke about the rental market in Georgetown and said there are about 766 units. She noted, by 2012, Georgetown will need about 2,179 affordable rental units.

Mayor asked and Bills clarified the meaning of "affordable" housing by saying they are units which are income restricted. She said the affordable units must remain at a certain rate. Mayor said the 766 units the City currently has are classified as affordable and are limited in how high they can raise their rent. Bills spoke about high-density and multifamily residences in Georgetown. She said there are no apartment complexes in the extraterritorial jurisdiction. She gave Council a slight view of the rental market in Georgetown. She spoke about the current policy recommendations and said there are fifteen that were found. She noted these recommendatons cover policies that are supposed to guide the City over the next 15-20 years. She noted the Housing Advisory Board desires the Council to approve policies that they find meaningful and applicable to Georgetown. Bills spoke about the responses to the Draft Housing Element survey which was given to Council. She listed what was considered the least and most important to the Council. She explained why the transit system is included in the Housing Element.

Speaker, Tim Todd, a new Housing Advisory Board member, said the goal of the Board is the adoption of the Housing Element of the 2030 Plan. He said, in order to accomplish that goal, they would like to work with the City Council on some of the outstanding issues with the draft Element and form a subcommittee that includes members of the Council. He said they are requesting to receive direction from the Council on priorities of the Housing Element. Mayor said it is the Board's recommendation to have a subcommittee of the Council to work with the Housing Advisory Board and work through the policies include in the Housing Element draft. Todd agreed.

Mayor asked and Bills said there is no item on Tuesday's agenda. Eason asked and Carls said the Board is looking for direction to put an item on a future agenda. Eason asked and Bills said the Board is in the middle of a Public Hearing and it will remain open until the Element is brought forward for a first reading. Oliver said and Todd agreed they have received too many conflicting views from Council and the Board would like to have a subcommittee research the issues in greater detail. Hoffman said the Board recommended adoption and that did not happen and added these are the steps the Board would like to take in order to move forward and adopt the Housing Element. Todd said the Board feels that, in light of current economic times, certain elements of the Housing Plan are becoming more urgent. He said they would like to move on as quickly as they can to develop the issues that are important to the City and the Council.

With a Powerpoint presentation, Garrett gave an overview of the item. She said there is an item on Tuesday's agenda to adopt the Parks and Recreation Master Plan.

Speaker, Jim Carrillo, said he will be presenting the final document but the recommendations are essentially the same as the ones last year. He gave Council facts about Georgetown's current parks system. He said this process involved a significant amount of public input. He said direct feedback was received from about one out of every thirty residents of the City. He noted most of the feedback is very positive. He said the public input showed that one of the greatest assets Georgetown has is its parks. He said, as part of the feedback, the public was very willing to support the system. He said the plan recognizes the potential significant future growth in Georgetown. He said this will become a roadmap for how Council will provide a high level of service to the residents. He noted no plan can operate without recognizing the economic environment and understand that things fluctuate. He spoke about existing system of neighborhood parks and community parks.

Carrillo highlighted the many gaps in the current Parks and Recreation system including public art in parks and along trails, the need for a large community park in the northwest quadrant of the City, spraygrounds, additional miles of trails, a sports complex on the west side of IH-35, parks within the downtown area, the preservation of remaining greenbelts, improved facilities at Lake Georgetown, and a second recreation center. He said there are a series of recommendations and he listed a few of them. He spoke about the land acquisition plan. He said the City will take a bigger role in this process with the larger parks. He mentioned the funding mechanisms that can be used for land acquisition. He also mentioned a long term goal of planning for a future recreation center on the west side of town. He spoke about addressing short term and long term aquatic facility needs as well as developing a future sports complex for northwest Georgetown. He said there are great opportunities in the downtown area for additional pocket parks as well as festival parks. He said another recommendation in the plan is to begin to develop a citywide trail system. He noted citizens want to see connectivity in the trail system.

Carrillo noted there was a concern with Sun City residents about trail connectivity. He said there is no longer a connection to the Sun City trail system. He mentioned enhancing the facilities around Lake Georgetown. He mentioned Garey Park and noted this is more of a long term goal. He mentioned renovating and enhancing San Gabriel Park as the "Central Park" of Georgetown as well as an ampitheater for festivals, performances, and a farmer's market. He said the citizens expressed a great interest in preserving the greenbelt and conservation areas throughout the City. He gave a summary of the key recommendations and shorter term strategies within the Parks Master Plan. He said the entire set of recommendations is ambitious. He said the plan will set the City on a path to maintain quality of its parks system as the area grows. Sattler asked about financing and funding of the outdoor festival area. Carrillo said the Council could have an agreement with a private company but it should be flexible in case the City wants to use the venue for its own events. Sansing asked and Garrett said there is a community garden in Georgetown.

With a Powerpoint presentation, Brandenburg gave the Council basic information on MUDs and listed their powers and duties.

He explained how MUDs pay for their services and facilities and spoke about their main purpose and what they can do. He said MUDs pay for their services and facilities through ad valorem taxes and by assessing service fees and charges. He mentioned and described MUD financing. He said a MUD is created by the legislature or petition. He said, with a MUD, the area can include land in the City limits or in the ETJ. He said they tend to be located in the fringe of the City. He spoke about consent agreements with MUDs both in City limits and in the City's ETJ. He reviewed annexation of MUDs by the City and the corresponding responsibilties of the City. He spoke about oversight of MUDs by TCEQ. He described the governance of MUDs and reviewed Chapter 13.10 of the Unified Development Code (UDC). He referred Council to a list of Georgetown Area MUDs. He mentioned the Goodwater MUD and said that Council will be looking at a resolution with that development. He said, with the legislature in session the MUD needs for certain things to be approved through the State. He went through an overview of the Bill as it relates to the Goodwater MUD. He gave Council the staff recommendation that states the creation of the MUD is wholly contingent on the satisfactory completion of an executed Consent Agreement by both parties before its full legal creation. He said staff met with Mr. Singleton days ago and everyone is on the same page.

Berryman asked and Carls said the Resolution on tomorrow's agenda does not serve the same purpose as a consent agreement. Oliver asked and Carls said this Resolution does not require any sort of change to the City's Unified Development Code. Carls said there are certain aspects of this MUD that are different and the actual consent agreement will be created by the legislature. Oliver asked and Brandenburg said staff has not come to a resolution on whether or not the MUD should be in the City limits. Brainard asked about the expected life of a MUD. Rundell said the MUDs will be there until the bonds are paid off. She said the City has a commitment to make sure that the payments will be made. Brainard asked and Rundell said the City usually makes it 20 year debt.

Rundell said this is the first discussion of priorities for the 2009-2010 budget. She referred Council to the priorities included in the Agenda packet. She said the items are continuations and projects that have come up at Council meetings. She mentioned the Council priority survey and said, this year, staff will take the survey electronically via a service called Survey Monkey. She mentioned what the survey includes. Rundell mentioned that Councilmember Oliver added a priority to the listing for consideration. Brandenburg said staff invited all Councilmembers to add priorities if they so choose. Brandenburg said Council expressed interest in adding the Economic Development Plan Element to the listing. He said, after the list is compiled, Council will rank the priorities. Rundell said the Council will also see the funding types on the list. Brainard asked to add no increase to property tax burden to the priority listing.

Berryman referred to the priority item related to recycling and said a lot of the funding is tied to stimulus plan money. Rundell said that thought process went into this listing. Ross said he would like to look at Brainard's recommendation on property tax burden with an analysis of real dollars. Sansing asked and Rundell said the City will receive preliminary property values from the appraisal district. Sansing asked and Rundell said the first preliminary estimate comes out in April. There was much discussion.

Mayor mentioned the Advanced Meter Reading system and Rundell noted that it would involved a multi-year budget process which is highly eligibile for stimulus funding. Brandenburg said the City is working on other funding sources for that project. Berryman said it would be smart to look for outside funding. Rundell said Council should look at the survey as if the City had no other money. Ross asked about the AMI implementation and Rundell said it is a three year implementation. She noted, if the City receives money, the project will have to be done within twenty four months. Brainard said all funds are not created equal and the priorities should be separated between general funds and utility funds. He said this is about making choices and he asked what their choices are in terms of funding the AMI system. Brainard said this whole thing should be organized as a decision matrix and noted AMI would not be competing with the recycling program. Brainard said it would be useful to add annual debt service rather than one time costs in the survey. Rundell agreed and said that could be done.

There were many questions about the Northwest Boulevard Bridge. Ross asked about the purchase of Fire Station Number 5 and the cost of that project. Rundell said she does not know the answer to that question and Brandenburg said it is probably around $60,00 an acre. There were many questions and comments from the City Council. Berryman asked and Rundell said there will be a Workshop about a new CAD system at the end of April. Sansing said he would like to see a County-wide system. Eason asked and Brandenburg said the transit system is on the list because it is still in progress. Eason said, with prioritizing, the items stay on the list until, someday, it gets moved up and approved. Rundell reviewed the requests from Council on what to add on the list. Brainard said he would like for the survey to show that one item is more expensive than others. There were many requests from the Council regarding the addition of items to the priority listing.

Meeting recessed to Executive Session under Sections 551.071 and 551.074 -- 6:31 p.m.
Meeting reopened and adjourned -- 7:46 p.m.