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Budget Committee Meeting
Draft Minutes
May 2, 2005, 7:00pm
Civic Center Council Chambers,
CALL TO ORDER
Chairman Jim Moore called the Ashland Budget Committee meeting to order at 7:00 p.m. on May 2, 2005 in the Civic Center Council Chambers,
ROLL CALL
Mayor Morrison was present. Councilor Amarotico, Hartzell, Jackson, and Silbiger were present. Councilor Hardesty and Hearn were absent. Budget Committee members Bond, Levine, Mackris, Olsen, and Thompson were present. Budget Committee member Williams was absent.
STAFF PRESENT: GINO GRIMALDI, CITY ADMINISTRATOR
LEE TUNEBERG, FINANCE DIRECTOR
TINA GRAY, HUMAN RESOURCES DIRECTOR
KEITH WOODLEY, FIRE CHIEF
DON ROBERTSON, PARKS DIRECTOR
MARGUERITTE HICKMAN, FIRE PROTECTION OFFICER
GREG CASE,
ANN SELTZER, MANAGEMENT ANALYST
MIKE FRANELL, CITY ATTORNEY
BARBARA CHRISTENSEN, CITY RECORDER
MIKE BIANCA, POLICE CHIEF
CINDY HANKS, PROJECT MANAGER
BRYN MORRISON, ADMINISTRATIVE SECRETARY
APPROVAL OF MINUTES
Approval of minutes from previous Budget Committee meetings dated:
5/5/04 Budget Committee Meeting
5/6/04 Budget Committee Meeting
5/12/04 Budget Committee Meeting
5/13/04 Budget Committee Meeting
5/20/04 Economic and Cultural Sub Committee Meeting
5/21/04 Economic and Cultural Sub Committee Meeting
Councilor Alex Amarotico/James Bond, Budget Committee member m/s to approve minutes as presented. All Ayes.
PUBLIC INPUT
None
BUDGET MESSAGE
Gino Grimaldi, City Administrator thanked staff for preparing the budget. He spoke to the difficulties in preparing the budget and controlling costs. He gave an overview of some of the aspects in the budget and how the budget was created.
He spoke to the cost of personal services. Costs are increasing dramatically due to health care and PERS. Fuel costs have also increased as well as steel and construction costs.
They have proposed an increase in property taxes. He explained that property taxes represent 18% of the budget but other revenues are not strong and the City is having a difficult time balancing revenues with expenditures. For the first time, they cannot complete all of the Council goals and have had to eliminate two, community visioning and a public survey.
They have had to cut some personnel additions. He spoke to positions that will be added in the budget. He spoke to moving the Senior program to the Parks department. He added that they have looked at what would happen if they did not fill positions requested and some are driven by Council goals.
He explained that they made the assumption that the community would like to receive programs they have received in previous years and they will make sure departments comply with guidelines established. They looked at the bottom line and found that the City was too far out of balance and directed materials and services to be reduced to balance the budget.
He spoke to the future and expressed the need to have a solid foundation to move forward. He suggested they may want to turn their attention away from the General Fund and in the future look at the Street Fund. He expressed the need to maintain the info structure and the need to look at affordable housing.
Lee Tuneberg, Finance Director spoke to the budget training that took place previously. He spoke to the layout of the document and to the budget message. He stated that they follow
He spoke to challenges the City faces. There was a significant increase in PERS of 46% which resulted in Departments showing a 20% increase. Health care is over 10% increase which came in lower than expected. They struggle with the amount they pay for wholesale power, construction, and fuel. He added they have maintained free bus service downtown, social service and economic and cultural development grants. They tried to maintain status quo or enhanced services. Property taxes are proposed to increase $.15 per thousand. He spoke to ending fund balances, revenue sources and categories of charges for services. He pointed to rate increases and spoke to systems development charges (SDC’s). He added that they are in the middle of a study on water and wastewater SDC’s. Councilor Kate Jackson asked if the ad hoc committee would be working on the SDC’s. Mr. Tuneberg responded that they would in June and July. He pointed to page 1-17 the reconciliation sheet, and suggested that the committee could make recommendation there.
He spoke to an increase of materials and services by 6%. Certain charges could not be held flat due to contracts. He added that internal charges had to be raised this year. He pointed out that debt service will be under $5 million and that it relates to refinancing AFN and stopping internal borrowing.
He pointed to page 1-15 and proposed personal services costs. He spoke to the reserves in the insurance fund that will be used to pay the PERS increase which is estimated at $400,000. There are 5.2 new positions proposed.
Mr. Tuneberg pointed to the Capital Improvements section which is budgeted at $7.8 million and stated that the section would be replaced due to disconnects at the next meeting.
Ms. Jackson asked about the bonds retiring and if the property tax rate would actually be less and where it was in the budget. Mr. Tuneberg pointed to page 1-39 and the amounts proposed. He explained that the Parks Fund and the Youth Activities Levy is unchanged. The total rate is 5.2553. He pointed to page A-2 and how it shows the history of total tax assessed. It is adjusted each year based on debt service required. The City levies the dollar amount and the county tells us after the rate. Mayor John Morrison asked if the final rate was lower than 2000-01. Mr. Tuneberg responded it was. Ray Olsen, Budget Committee member asked why the 97 flood restoration doubled. Mr. Tuneberg responded that they look at the debt service amount that has to be paid each year and where it is located in budget and set the appropriate rate and it changes each year for what they have to pay.
Lynn Thompson, Budget Committee member asked why on page A-3, the proposed tax levy for the General Fund has increased $500,000. Mr. Tuneberg responded that $247,000 was due to the $.15 increase in tax and the rest is growth due to Measure 50 and construction costs. Councilor Russ Silbiger asked if they will be able to maintain the rate. Mr. Tuneberg responded that there are still some unknowns. He explained the permanent rate is 4.29 but they will try not to raise it to that. He added that Departments have had a hard time holding expenses, and have less carry forward each year. Mr. Grimaldi pointed to page 4-10 and the deficiency of revenues over expenditures. Marty Levine, Budget Committee member asked to clarify the 4.29 rate to the 3.56 that we use. Mr. Tuneberg responded that included in 4.29 are the General Fund and Parks Fund and they have an additional $.73 that could be added to it.
Ms. Jackson asked about the tax rate in future years. Mr. Tuneberg responded that the shortfall is calculated on the bottom of the long term tables and there is a policy established. There is a disconnect between revenues and expenses stays constant. Mr. Moore asked if the City didn’t have AFN debt if it would still have $.15 increase. Mr. Tuneberg responded that it is not related to that.
Mr. Levine asked if the Parks budget adjusted in percentage to the City’s. Mr. Tuneberg responded that there is not a policy that states that it must adjust according to the City’s. Mr. Tuneberg explained that Parks activity is normal. Mr. Levine asked if the normal rate increase per month was 1%. Mr. Tuneberg responded that it was not and pointed to the activity in fund.
Mr. Morrison asked if the Council goals that were eliminated would be put back in the budget for the next year. Mr. Grimaldi answered it would be a discussion of Council and there was no guarantee. Councilor Cate Hartzell asked what the cost was for free bus service. Mr. Tuneberg responded $290,000 which was $250,000 and an additional $40,000 for free rider. Mr. Grimaldi added that SOU’s financial participation has dropped and the City has picked up the cost. The Committee asked for a history of when it was established and the costs. Staff will provide during Public Works department presentation.
CITY RECORDER page 3-39 to 3-42
Barbara Christensen, City Recorder/Treasurer presented her budget. She spoke to the function of the office and responsibilities which include: Treasurer and City Recorder, banking services, council, records management, public records requests, and elections. They have several software programs for electronic filing and the municipal code. She proposed a reclass of the Clerk II to an Administrative Assistant. Kathleen Mackris, Budget Committee member asked if the imagining system was included in the budget. Ms. Christensen explained that it was in last year’s budget and the cost this year is maintenance. Ms. Christensen explained that they are out of space for record storage and will be looking for funding for storage in the future. Mr. Grimaldi added that the building that was intended to be used for storage was denied by the Historic Commission so an alternative must be found. Ms. Hartzell asked about the $10,000 increase. Ms. Christensen explained it is a total overall increase of the budget and mostly in personal services.
Levine/Jackson m/s to accept budget as presented. All Ayes.
ADMINISTRATION page 3-3 to 3-16
Tina Gray, Human Resource Directed presented the Administration budget. She gave an overview of the Mayor and Council budget. The significant changes are an increase in personal services, change over in elected officials and benefit selection and travel and training. Ms. Gray explained that the benefit package is optional for Councilors. Ms. Hartzell asked about line item 606. Ms. Gray explained it is for advertising, travel and training. Ms. Hartzell asked what the commission was for. Mr. Grimaldi responded that he will get back to them with the answer. Mr. Silbiger spoke to Resolution 99-62 that was presented. He pointed to how expenses have increased and wondered if Council had followed the Resolution. Mr. Grimaldi explained that different Councilors approach training differently and it increases with new members. Mr. Levine asked about the
Ms. Gray spoke to the Administration division. The significant changes are in personal services, materials and services were kept flat. Ms. Hartzell asked about the Senior program and who decided on restructuring. Mr. Grimaldi explained the reasoning for moving it to the Parks. He stated that it fits better with the services provided by the Parks. Ms. Hartzell asked if that meant there would be a removal of a department head and a salary decrease for the program director. Mr. Grimaldi responded that the reporting relationship changes to the Parks director and clarified that the program director is not paid the department head salary and there would be no salary change. Mr. Grimaldi explained that this was originally thought of as an organizational change and then they saw the potential advantage for the budget process. Ms. Hartzell asked if the Parks Commission approved. Mr. Grimaldi responded they approved unanimously. As well as the Senior commission approved unanimously. Sharon Laws, Senior Program Director explained the services provided. Ms. Hartzell stated that she is concerned about social service aspect and how service will be managed in the future.
Mike Franell, City Attorney spoke to the salaries funded in the department and the function of the department. He stated there was no tremendous changes in the budget. The supplies have remained constant and they have decreased reliance on outside council. They have brought in house labor related issues and have increased purchased services for travel, training, and dues. Ms. Hartzell asked about the salary increase. Mr. Franell responded that the increase in salary was for the Assistant City Attorney and they felt that the City was low compared to others and the salary range was similar to the building official and the senior planner.
Ms. Gray spoke to the Human Resources division. The significant changes are increased costs in personal costs and fringe benefits. The increases in advertising costs are due to affirmative action and outreach into other areas. They will enhance training issues in the workplace. Ms. Mackris asked about the increase in miscellaneous charges and fees. Ms. Gray explained it is the facilities use fee. Ms. Hartzell asked about the staff reclassification. Ms. Gray responded that they are reclassifying the administrative assistant to a personnel assistant and the salary to the executive secretary salary range.
Amarotico/Olsen m/s to accept budget as presented. 11 voted yes. Hartzell apposed.
Ann Seltzer, Management Analyst introduced the Public Arts Commission. Richard Benson, the chair of commission, introduced the commission. He gave the background of the commission and explained the need for consistent funding to maintain the Council mandate for arts. He explained that there is no funding source provided in the Ordinance. He spoke to the costs of some projects and what other Cities have for funding.
The Commission developed three possible funding sources for art: 1) 1% of the CIP project budgets and .5% of TOT tax, 2) annual allotment of $50,000 from TOT, or 3) $.03 increase in property tax. Ms. Jackson added more background on the commission. She spoke to the Resolution that would not allow them to obtain economic and cultural development grants and how they asked for remaining funds from 2005 to go to the commission. The Committee discussed if they thought it was a budget committee decision or one that should be made by Council. Ms. Jackson responded that Council and staff supports it and they are coming to the budget committee at the recommendation of staff. Ms. Hartzell stated that she felt it should be directed to Council first and the budget committee is not the correct venue. Ms. Seltzer responded that the commission had come before Council and Council directed them to come before the budget committee. Mr. Levine asked if there were any funds in the proposed budget for them. Mr. Grimaldi responded that there is not. The Committee came to a consensus that it should be taken to Council and guidance should be given in this budget process.
Break until 9:45
Mr. Tuneberg suggested due to the limited time available to postpone the Finance section until 5/12/05. Committee agreed.
ADJOURNMENT
The meeting was adjourned at 9:50 p.m.
Respectively Submitted,
Bryn Morrison
Administrative Secretary