CITY OF LAREDO

ANNUAL BUDGET WORKSHOP

M2002-W-004

CITY COUNCIL CHAMBERS

1110 HOUSTON STREET

LAREDO, TEXAS 78040

AUGUST 12, 2002

5:35 P.M.

 

SPECIAL NOTICE TO THE PUBLIC

 

During this budget workshop, the budgets of each of the Departments of the City of Laredo, as hereinafter listed, will be discussed.  In these discussions will be included the matter of the number of employees in each Department, their classifications and positions, their salaries and the benefits of employment such as health and life insurance, retirement benefits licensing and continuing education; also there will be discussed the matter of supplies and materials acquisitions, land acquisitions, capital improvements, equipment and tools acquisitions, and matters necessary to the functioning of each department in the accomplishment of its assigned goals and objectives.

 

I.          CALL TO ORDER

 

            With a quorum present, Mayor Elizabeth G.  Flores called the meeting to order.

 

II.        ROLL CALL

 

            Elizabeth G.  Flores,                                                                 Mayor

            Alfredo Agredano,                                                                    Mayor Pro Tempore, District I

            Hector Garcia,                                                                          Council Member, District II

            John C.  Galo,                                                                          Council Member, District III

            Johnny Amaya,                                                                         Council Member, District IV

            Eliseo Valdez, Jr.,                                                                     Council Member, District V

            Gene Belmares,                                                                        Council Member, District VI

            Jose A.  Valdez, Jr.,                                                                 Council Member, District VII

            Juan Ramirez,                                                                           Council Member, District VIII

            Gustavo Guevara, Jr.,                                                               City Secretary

            Larry Dovalina,                                                                         City Manager

            Cynthia Collazo,                                                                       Assistant City Manager

            Jaime Flores,                                                                            City Attorney

           

III.       DISCUSSION AND POSSIBLE ACTION REGARDING THE PROPOSED FISCAL YEAR 2002-2003 ANNUAL BUDGET.

 

A.  Introduction to budget by City Manager Larry Dovalina, including budget

      process, vision and goals, update of current bond projects, and proposed new

      personnel.

 

Larry Dovalina, City Manager, explained that staff has worked diligently to present the budget workshop with no hidden agendas or tricks.  He encouraged Council to ask questions at any given time.  The goal for every department is to provide the best services and the basic services without any interruptions.  Finally, he gave a comprehensive report on the budget for 2002-2003. 

 

B.  Ad-valorem tax rate

 

            Phyllis Colon, Tax Assessor/Collector, gave the following presentation:

 

Webb County Appraisal District

 

Certification of year 2002 Appraisal Roll

For the City of Laredo

 

            Total Appraised Value $6,618,760,457

            Total Assessed Value               $6,459,119,870

            Total Taxable Value                  $5,552,568,287

 

            2001    Taxable Value Loss to first time qualification                  $8,814,285

            2001    Taxable Value Loss to first time qualify for Ag Value     $330

            Pollution Control exemption                                                                  $452,760

            Taxable Value of Property under protest                                               $6,413,930

            Taxable Value of Property Annexed                                                      $3,693,540

            Taxable Value of New Improvements                                       $298,107,420

 

Taxable Values

           

Year

Value

% Increase

94/95

$3,014,769,360

8.9%

95/96

$3,282,444,963

7.8%

96/97

$3,538,521,904

7.8%

97/98

$3,806,075,234

7.6%

98/99

$4,073,722,461

7%

99/00

$4,354,083,033

6.9%

00/01

$4,700,652,717

7.9%

01/02

$5,055,436,374

7.5%

02/03

$5,552,568,287

9.8%

 

History of Tax Rates

 

94/95

0.551600

95/96

0.551601

96/97

0.526766

97/98

0.539930

98/99

0.539930

99/00

0.569218

00/01

0.576358

01/02

0.576358

 

 

 

Current Tax Levy

 

94/95

$16,039,990

95/96

18,265,316

96/97

19,146,735

97/98

20,550,143

98/99

21,995,250

99/00

24,784,228

00/01

27,168,694

01/02

29,224,731

 

Amount of Current Collections

 

94/95

$15,496,593

95/96

$16,954,182

96/97

$18,249,510

97/98

$19,377,343

98/99

$20,643,873

99/00

$23,445,387

00/01

$25,821,461

01/02

$28,139,304

 

Term Definitions

 

Total Appraised Value – the value of all property in the City including exempt property of governments, schools, churches.

 

Total Assessed Value – the market value of all taxable property.

 

Total Taxable Value – Value less exemption for Over-65, for Veterans Agriculture Use, limitation on increase on value of homesteads. 

 

Taxable Value Loss to first time qualification – Taxable value lost from previous year due to qualifying for an exemption for the first time.

 

Taxable Value loss to first time qualify for Ag-value – Taxable value lost due to new Ad Use Exemption.

 

Pollution Control Exemption – An exemption for taxation for all or part of real and personal property that the person owns and that is used wholly or partly as a facility, device, or method for the control of air, water, or land pollution.

 

Taxable Value of Property Under Protest – the value of property that is still under protest before the Appraisal Review Board.  This may be taken to court if a settlement can not be reached.

 

Taxable Value of Property Annexed – Taxable value of property annexed before the end of 2001.

 

Taxable Value of New Improvements – this includes building and personal property. 

 

This notice concerns 2002 property tax rates for the City of Laredo.  It presents information about three tax rates.  Last year’s tax rate is the actual rate the taxing unit used to determine property taxes last year.  This year’s effective tax rate would impose the same total taxes as last year if you compare properties taxed in both years.  This year’s rollback tax rate is the highest tax rate the taxing unit can set before taxpayers can start tax rollback procedures.  In each case these rates are found by dividing the total amount of taxes by the tax base (the total value of taxable property) with adjustments as required by state law.  The rates are given per $100 of property value.

 

Last year’s tax rate:

 

Last year’s operating taxes                                                                   $21,407,220

Last year’s debt taxes                                                                           $8,127,369

Last year’s total taxes                                                                           $29,534,589

Last Year’s tax base                                                                             $5,124,347,888

Last year’s total tax rate                                                                        $0.576358/100

This year’s effective tax rate:

Last year’s adjusted taxes                                                                     $29,483,785

(after subtracting taxes on lost property)

/This year’s adjusted tax base                                                               $5,256,728,497

(after subtracting value of new property)

= This year’s effective tax rate                                                               0.560877/$100

x 1.03 = maximum rate unless unit                                                         0.577703 /$100

publishes notices and hold hearing        

This year’s rollback tax rate

Last year’s adjusted operating taxes (after                                             $21,404,559

Subtracting taxes on lost property and adjusting for any

transferred function, tax increment financing, and/or

enhanced indigent health care expenditures)

/This year’s adjusted tax base                                                               $5,256,728,497

= This year’s effective operating rate                                                     0.407184/$100

x 1.08 = this year’s maximum operating rate                                          0.439758/$100

+ This year’s debt rate                                                                          0.145776/$100

= This year’s rollback rate                                                                    0.585534/$100

 

Statement of Increase/Decrease

 

If the City of Laredo adopts a 2002 tax rate equal to the effective tax rate of $0.560877 per $100 of value, taxes would increase compared to 2001 taxes by $1,641,924.

 

The following estimated balances will be left in the unit’s property tax accounts at the end of the fiscal year.  These balances are not encumbered by a corresponding debt obligation.

 

Type of Property Tax Fund                                                               Balance

General Fund                                                                                        $5,658,986

 

Schedule B

2002 Debt Service

 

The unit plans to pay the following amounts for long-term that are secured by property taxes.  These amounts will be paid from property tax revenues (or additional sales tax revenues, if applicable).

 

Description of Debt                  Principal                       Interest                         Total Payment

 

2000 Airport C                        $65,000                       $115,148                     $180,148

2000 CO PPFCO                    $990                            $45,647                       $46,637

2000 ACO PPFCO                 $290,000                     $61,278                       $351,278

2002 CO PPFCO                                                        $498,234                     $498,234

1992 GO Bonds                       $170,000                     $5,398                         $175,398

1992 G O Refund bond            $796,303                     $174,444                     $970,747

1993 Bond                               $140,000                     $13,825                       $153,825

1994  G 0                                $290,000                     $39,960                       $329,960

1994A G O                              $590,000                     $124,232                     $714,232

1996 G O                                $1,140,000                  $684,276                     $1,824,276

1997 G O                                $220,000                     $272,260                     $492,260

1997B Cert. O Obli                 $118,622                     $30,438                       $149,060

1998 G O                                $809,682                     $670,475                     $1,480,157

1998  GO Refund Bond                                               $736,808                     $736,808

 

Total required for 2002 debt service                                                                 $8,103,020

Total to be paid from taxes in 2002                                                                   $8,103,020

Total debt levy                                                                                                  $8,103,020

 

MOTION

 

Approval of the 2002 Appraisal Roll from Webb County Appraisal District for the development of the City tax roll and acceptance of the calculation of the effective tax rate for fiscal year 2002-2003.

 

Moved:  Cm.  Galo

Second:  Cm.  Amaya

For:     8                                               Against:  0                                            Abstain:  0

 

Phyllis Colon, Tax Collector/Assessor, also submitted document pertaining to the appraisal records that can be viewed at the City Secretary’s Office. 

 

C.  Debt service review, including update of debt service indebtedness.

 

Rosario Cabello, Finance Director gave the following presentation before the Council:

 

The total outstanding debt for the City is $260,000,000.  It is comprised of three different categories:  General Obligation Debt, Revenue Bonds, and Certificates of Obligation. 

 

                        City of Laredo Total Outstanding Debt by Type September 30, 2002

 

                        General Obligation Bonds                                             23%     61 Million

                        Certificates of Obligation Bonds                                    36%     93 Million

                        Revenue Bonds                                                            41%     107 Million

 

                        Total Outstanding Debt by Source

 

                        General obligation                                                         23%

                        Arena                                                                           15%

                        Water System                                                               3%

                        Sewer System                                                              2%      

                        Int’l Toll Bridge                                                            21%

                        Self Supporting                                                 36%    

 

                        Total Self Supporting Outstanding Debt

                        September 30, 2002

 

                        Landfill                                                             13%     11.2 Million

                        C. I. F.                                                                         10%     9.2 Million

                        Airport                                                                         6%       5.7 Million

                        Others                                                                          3%       6.6 Million

                        Water                                                                           38%     33 Million

                        Sewer                                                                          30%     26.9 Million

                       

                        Debt Service Payments Next Five Years

 

                        Self Supporting

 

                        2003                                                                                        $12.2 Million

                        2004                                                                                        $11.6

                        2005                                                                                        $11.2

                        2006                                                                                        $11.0

                        2007                                                                                        $10.0

 

 

 

 

 

 

 

            Tax Supported                                                                       

 

            2003                                                                                        $7.2

            2004                                                                                        $7.4

            2005                                                                                        $7.7

            2006                                                                                        $7.6

            2007                                                                                        $6.8

 

City of Laredo Tax Rate Impact – 2002 Bond Issue Post 2002

 

            Existing Debt Service                                                                $212,902,841

            Comb. Tax & Rev C/O                                                            $14,941,447

            PPF Contractual Obligations                                                     $2,413,774

            Total Debt Service                                                                    $230,258,062

            Less Self-Supporting Debt                                                        $148,282,682

            Total Net Debt Service                                                 $81,975,380

 

D.  Personnel issues, including presentation of proposed employee pay plan and  

       Proposed employee health and benefits plan.

 

            Dan Migura, Administrative Service Director, gave the following presentation:

 

            Mission Statement

 

To attract, maintain, and develop a quality workforce by providing employee training, benefits, security and safety to the City of Laredo organization; while minimizing the potential for risk and exposure to liabilities.

 

Proposed Pay Plan Adjustment

 

2.8 cost of living adjustment (COLA) for an effective date of 10-01-02 to all employees (except unless otherwise addressed in a collective bargaining agreement)

 

Retain the current merit pay plan

 

Entry Level Wages of Index Cities

 

Waco                                       $5.77                                       Recreational Aid

Wichita Falls                             $6.05                                       Golf Course Attend.

Abilene                         $6.15                                       Nurse’s Aide

San Angelo                               $6.81                                       Laborer

Laredo                                     $6.89                                       Laborer

Harlingen