At a city council budget workshop a week ago today, City Manager Scott Sellers revealed the cost to expand the capacity of the city’s wastewater treatment plant was going to be $9 million more than originally anticipated for a total of $26 million. Not only that, Sellers told the council the city will need to borrow $20 million via a bond sale during the 2018-19 fiscal year to pay for the expansion. Sellers called this revelation "the most disturbing" part of his presentation. Mayor Travis Mitchell, who hates the notion of the city increasing its debt load, looked as if he had just lost his closest friend.
But it appears the city is not wasting time in efforts to try to find ways to reduce that $26 million bottom line cost. It is asking the city council, during its meeting Tuesday, to approve paying $24,664 to the Austin office of CP&Y, Inc., a Dallas-based architectural and engineering firm, so that in the next four or so weeks it can recommend some cost-cutting measures. According to its website, CP&Y boasts "We develop cost-effective solutions, considering both capital and operation costs that best fit our clients' needs while integrating cutting-edge sustainable practices." CP&Y is well known in Dallas where it is responsible for the long-term planning of the city’s water system as well as overseeing several rail expansions for the Dallas Area Rapid Transit system.
Under the city’s plan, CP&Y will be given four weeks to come up with ways to reduce that $26 projected cost to expand the wastewater treatment plant’s capacity from 3 million gallons per day to 4.5 MGD. The company will be asked to perform "value engineering" of the design for the expansion prepared by Burgess and Niple, Inc., the company handling the expansion project Within seven days of the date CP&Y receives the design information from B&N, it will be required to conduct a value engineering workshop with representatives from the city and B&N in order to prepare something called a "value engineering report." CP&Y must then present its report 14 days after that workshop and then a week after that it must conduct "a final workshop to present their findings and potential cost savings recommendations." City spokesperson Kim Hilsenbeck informed me yesterday that, unfortunately, this workshop will not be open to the media, so the public will have to await the city’s public announcement, if one is forthcoming, of any possible cost-saving recommendations produced by this study.
Hilsenbeck did confirm, however, that Tuesday’s request for the council to approve money to pay for the study is the direct result of the cost overruns. "Yes, we're looking for a third-party value engineering of the current plan," she said when asked specifically if the two items were directly connected.
She also said the city’s projections for the amount that might be saved by this endeavor with CP&Y are "difficult to estimate at this point," but one would hope the company will find significantly more than $24,664 in savings.
Tuesday’s council agenda also includes a review and acceptance of the city’s Comprehensive Annual Financial Report (CAFR) and the Independent Auditors' Report for the last fiscal year. The independent auditors issued an unqualified or "clean" auditors' report for the fiscal year, which, according to city Finance Director Perwez Moheet, "is the highest or the best type of an independent auditors' report that can be issued on the financial statements of governmental entities in the United States of America including city governments."
According to the report, the city ended the last fiscal year with $263.1 million in assets against only $99.3 million in liabilities, an increase in the net position of $26.5 million or 19.3 percent from the previous fiscal year. The General Fund balance of $13.8 million at the end of the last fiscal year was 31.4 percent more than the year before.
The CAFR should be available on the city’s web site, I would guess, within 24 hours of the council’s acceptance of the document Tuesday. For those who complain about lack of transparency, it is a must-read. It will tell you everything you need to know about the city’s operations.
"Among the major indicators of a stable yet an expanding local economy include growth in population, building permits, taxable valuations, property tax collection rate, and the trend for sales tax collections," according to the CAFR. "We are pleased to report that the annual increase in building permits increased by 6.1 percent, taxable valuations increased by 12.8 percent (tax year 2017) as compared to the prior tax year, annual property tax collection rate has continued to surpass the 98 percent level, and sales tax collections increased by 10.8 percent as compared to the prior year as well. Total population in the City of Kyle is projected to increase to an estimated 50,000 residents by the year 2020.
"The city's bond rating was reaffirmed at AA- by Standard and Poor's rating agency based on the city’s strong liquidity and financial position, stable economic growth outlook in Kyle, and the city’s strong financial management conditions due largely to its financial management practices," the CAFR reported.
One other item worth noting on Tuesday’s agenda reflects how seriously the city is taking this whole "core values" idea. The city had, up to now, only informally adopted the idea of adhering to a culture wrapped around the notion of the four letters of the city’s name (1) knowledge, (2) yes attitude, (3) leading edge and (4) employee accountability. Now it is taking this one step further — to set it in stone, as it were. It is asking the council to amend the ordinances governing the city’s personnel policy to incorporate this culture.
Under the amended ordinance, "All employees are expected to be committed to the goals and the culture of the organization. Employees that fail to adhere to the city’s core values will be subject to discipline, up to and including termination of employment."
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