Agenda

Return

City Council Regular Meeting

Meeting Date:

08/10/2021

BACKGROUND

Workshop on the Proposed FY 2021-22 Budget and highlights from the General Fund, W&S Fund, EMS Fund, Drainage Fund, SEDC, and Restricted Revenue Funds.

General Fund revenue will increase 5.2% over FY 2020-21 year end estimates not including the transfer in from reserves. The largest contributor to this increase will be from property and sales taxes. The property taxes for FY 2021-22 are estimated to increase 6.3% and sales taxes are estimated to increase 3.3%.

The sales tax growth trend follows the area development growth and the potential for new businesses.

Miscellaneous Income is expected to decrease 24.2% in FY 2021-22 from the year end estimates due to an anticipated lower yield on investments. The investment income closely follows the Federal Funds Rate which is near zero which will decrease the investment income in the proposed budget year.

The overall FY 2021-22 General Fund Operating Budget increased 3.2% from FY 2020-21 year end estimates. This increase includes $157,000 for new positions and personnel programs for Police and Facilities Maintenance. The new personnel assignments will be based on an independent firm’s staffing recommendations after review of the practices and service levels of the City.

Another notable item for the FY 2021-22 Budget is the implementation of the Classification & Compensation Study’s second year recommendation. This study by a 3^rd party reviews market wages and makes recommendations for compensation adjustments for City staff. The first year recommended adjustment was effective on July 4^th, 2020 while the second phase will be effective on October 1^st, 2021. The study also recommended annual Employment Cost Index (ECI) adjustments. The budget includes $52,750 for a 0.25% ECI for all employees effective October 1^st

Included in the Budget for FY 2021-22 is setting a new minimum wage of $15. Comparable positions in the surrounding cities are at or above this amount and this change costs $87,000.

This budget also allocates $500,000 to replace the financial software. Schertz has used the current software platform for the past 20 years and it no longer can meet the demands of staff and the public.

The Facilities Maintenance and Parks Budget will also increase by $75,000 combined for contract cleaning for public safety buildings and the park restrooms. This would allow staff to focus on preventative maintenance and new initiatives rather than cleaning.

The annual budget is required to have a public hearing before adoption. Staff recommends holding that hearing on August 24, and September 7, and adopt the budget on second reading on September 14, 2021. This follows the regulations set by the state in the Local Government Code on budget adoption chapter 102.

GOAL

To review the budget and proposed changes.

COMMUNITY BENEFIT

The Proposed Budget is submitted to the City Council and is available on the website for the public to review.

SUMMARY OF RECOMMENDED ACTION

No action taken tonight. There will be a public hearing on the budget on August 24th and on September 7th prior to adoption.

FISCAL IMPACT

The budget is an operational increase of $1,012,404 or a 2.7% increase over the FY 2020-21 Adopted Budget.

Non Personnel Budgets decreased 2.3% due to the police restroom remodel wrapping up and the comprehensive land use plan funding from FY 2020-21 which offest an increase in vehicle and large equipment replacements.

Personnel Budgets increase 5.4% with the first Class & Comp Study recommendation implementation, the merit program, anticipated medical insurance changes, a Employment Cost Index adjustment, and the addition of 3 new positions.

RECOMMENDATION

No action tonight, staff will return with a public hearing on August 24 and September 7 and adoption ordinance on September 7 and September 14.

Attachments
FY 2021-22 Proposed Budget