Budget Committee Meeting
April 20, 2006, 7:00pm
Civic Center Council Chambers,
CALL TO ORDER
Chairman Marty Levine called the Ashland Budget Committee meeting to order at 7:00 p.m. on April 20, 2006 in the Civic Center Council Chambers,
Mayor Morrison was present. Councilor Amarotico, Chapman, Hardesty, Jackson, and Silbiger were present. Councilor Hartzel was absent. Budget Committee members Bond, Levine, Everson, Mackris, Stebbins, Gregorio and Thompson were present.
STAFF PRESENT: GINO GRIMALDI, CITY ADMINISTRATOR
LEE TUNEBERG, AMINISTRATIVE SERVICES DIRECTOR
KEITH WOODLEY, FIRE CHIEF
MARGUERITTE HICKMAN, FIRE PROTECTION OFFICER
ANN SELTZER, MANAGEMENT ANALYST
MIKE FRANELL, CITY ATTORNEY
BILL MOLNAR, INTERIM COMMUNITY DEVELOPMENT DIRECTOR
RICHARD WALSH, DEPUTY POLICE CHIEF
DIANA SHIPLET, EXECUTIVE SECRETARY
JOSEPH FRANELL, IT DIRECTOR
CINDY HANKS, PROJECT MANAGER
VERONICA WARD, ADMINISTRATIVE ASSISTANT
APPROVAL OF MINUTES
Approval of minutes from previous Budget Committee meeting dated 2/22/06.
Budget Committee Member Everson/Councilor Jackson ms approval of minutes as presented. All Ayes.
Lee Tuneberg, Administrative Services/Finance Director spoke to the handouts and correction to the Agenda. The Administration Department and Legal Department budgets would be presented rather than the Finance Department as previously shown.
Gino Grimaldi, City Administrator spoke to the goals of the City in the upcoming year. He stated that there is not a property tax rate increase proposed for FY 2007. He stated that currently the growth of expenditures is higher than the growth of revenues. He added that staff is looking into long range planning and controled spending by placing caps on department’s budgets. Prioritization of services will aid in balancing operational budgets in the future. Mr. Grimaldi spoke to the upcoming changes within the organization and assured the Committee that the proposed budget was presented with confidence.
Mr. Tuneberg gave an overview of the handouts provided to the Committee. He spoke about the budget variables, time issues, and how this was a difficult budget to prepare. He added that staff looked at funding of capital projects and AFN and that will impact the budget. Fund balances have been a significant part in balancing the budget and are not as stable as they have been in the past. There may not be the revenue streams that have been there in the past. There may need to be an increase in rates or property taxes to balance the funds.
Mr. Tuneberg explained Internal Service charges which include Central Services, Insurance Services, and Facilities Equipment. He spoke to the assumptions used and departments maintaining a 3% increase in materials and services. He spoke to construction costs and health care costs increasing. He noted that the City was notified by the health care provider that there will be a 3% increase in FY 2007 which is less than expected.
Mr. Tuneberg discussed the summary pages located within the Introductory section of the Proposed Budget. He spoke to the recent SDC study and this has shown a potential need for a rate increase. He pointed to the Utility rates table and that the increases are expected to be less than anticipated.
The Committee discussed requirements in Oregon Budget Law. Mr. Tuneberg stated that some departments budgets spread over several funds. The Committee discussed the City’s debt and that the table on page 3-137 shows the City’s General Obligation debt. Mr. Tuneberg pointed to the property tax summary and that the increase is due to debt service.
The Committee discussed that increases in staff are not shown in the Proposed Budget. Mr. Tuneberg explained that two utility positions were included in the budget and will be funded by a rate increase.
The Committee asked to clarify page 1-7, fourth paragraph “short term budget” and how the City will prioritize. Mr. Tuneberg responded that short term referred to the next 2 years and that the City will need to prioritize what services it provides. The City may separate the Street Fund, for instance, to monitor services compared to maintenance. The Committee discussed that they do not want to cut services at this point to balance the budget. Mr. Tuneberg added that the City has to look at long range planning and what services to provide.
The Committee discussed construction costs and projects and how the timing of receiving bids and weather problems may extend the time period of projects. Mr. Tuneberg added that putting off projects may also increase the cost in the long term.
The Committee questioned if removing the electric surcharge would lessen the electric rate increase. Mr. Tuneberg responded that the electric rate will cover the electricity costs and will increase by 2%. He added that the Electric Director will discuss with the Committee the relationship the City has with BPA and how that influences rates. Rate increases now should be based on power costs.
The Committee discussed the fund balances and percentages used in maintaining fund balances. Mr. Tuneberg responded that staff reviews the percentages each year and looks at the sensitivity of funds in rate models.
Mr. Tuneberg added that last year the City did not levy $.57 of property tax and that has equaled around 1 million dollars.
The Committee requested that staff provide the amount that the property tax would need to increase to include all of the proposed requested positions.
Ann Seltzer, Management Analyst presented the Administration Department budget. She gave an overview of what each division is responsible for. She spoke to the Personal Services costs and Materials and Services costs. The Committee questioned the increase in supplies in Mayor and Council and it was explained that it was for the chairs for the Council Chambers. The Committee questioned if the Charter states that the Mayor and Council receive fringe benefits instead of salary. Ms. Seltzer responded that it does not. The Committee asked if the history and determination on providing fringe benefits be researched and brought back to them.
The Committee questioned what Contractual Services were. Ms. Seltzer responded Council goal setting.
Ms. Seltzer spoke to the items to be considered for the adopted budget. First being the community visioning and the second an ad hoc Economic Development Commission. Ms. Jackson committed on the direct cost of the Economic Development Commission would also include indirect costs such as staff time. The Committee asked what property tax increase would be needed for the Community Visioning. Mr. Tuneberg responded that $.01 per $1,000 would generate $16,900, so $150,000 would be approximately $.09 increase in property tax. The Committee discussed how they will decide on these additional items. They would like to hear direction from Council and the Mayor. Mayor Morrison stated that he would like the community visioning to proceed. The Committee continued to discuss Council goals compared to budget priorities.
Ms. Everson/Budget Committee Member James Bond ms to accept the Administration Department as presented. All Ayes.
Mike Franell, City Attorney spoke on the Legal Division budget. He spoke to activities located within this budget and the budget figures.
Mr. Bond/ Councilor Jack Hardesty ms to accept the Legal Division budget as presented. All Ayes.
Mr. Tuneberg reminded the Committee that there is a listing of definitions in the Appendix that may assist the Committee.
The meeting was adjourned at 9:04 p.m.