Budget Committee Meeting
April 24, 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 24, 2006 in the Civic Center Council Chambers,
Mayor Morrison was present. Councilor members Amarotico, Silbiger, Hardesty, Hartzell, and Jackson were present. Councilor Chapman was absent. Budget Committee members Bond, Mackris, Stebbins, Levine, Thompson, Gregorio were present. Committee member Everson was absent.
STAFF PRESENT: GINO GRIMALDI, CITY ADMINISTRATOR
LEE TUNEBERG, AMINISTRATIVE SERVICES DIRECTOR
TINA GRAY, HUMAN RESOURCE DIRECTOR
BARBARA CHRISTENSEN, CITY RECORDER/TREASURER
CINDY HANKS, PROJECT MANAGER
VERONICA WARD, ADMINISTRATIVE ASSISTANT
APPROVAL OF MINUTES
Barbara Christensen, City Recorder/Treasurer presented the City Recorder budget. She stated that a significant budget change is the City facility use fee. She spoke to the increase of the credit card/merchant fees and that the process of accounting for these fees has changed and the price has increased. The City Recorder department will now take a percentage of each department merchant fees and the expense associated with those transactions. She stated that these two increases in her budget are uncontrollable by her.
The Committee discussed if the increase of credit card usage had an impact on revenue. Lee Tuneberg, Administrative Services/Finance Director responded that
as long as there is a discount on fees paid to the City then there would be a loss of revenue. The benefit is in customer service and the City would receive that payment sooner for customers who would pay by credit card than by check or cash. There is a balancing act as to what fees the City charges to offset the percentage of merchant fees. Mr. Tuneberg pointed to page 3-20 and the graph that shows the payment trends in the utility office. This also shows a projection of web payment access in the future and what the frequency of payments is.
The Committee questioned the increase in Other Purchased Services. Ms. Christensen responded that there was an increase in advertising for public notices and recording of documents. The Committee discussed the Central Service fees that are associated with this department. Mr. Tuneberg explained that in this fund, the City does not recognize revenues to specific departments but to the entire fund.
Ms. Christensen added that the recording office is generating revenue by offering passport services and $400 is generated per month. The Committee questioned why the passport revenue was not credited back to the Recorder budget. Mr. Tuneberg explained that the City does fund accounting where the revenue is put into the Central Service fund as a resource and helps decrease the internal charges to other departments.
The Committee asked staff for more detail on the departments increase in operational costs.
James Bond, Committee Member/Councilor Jackson ms to approve the Recorders Budget as presented. All Ayes.
Mr. Tuneberg presented the department budget. He pointed to how operating expenses are separated from non operating. He pointed to the increase in the Human Resource budget due to increased recruitments. He added that the City provides a wellness program which may attribute to the lower cost of health insurance. He stated that a transfer of appropriation might be needed due to the cost of recruitments.
Mr. Tuneberg spoke to the Municipal Court budget that resides in the General Fund. He spoke to the recent software addition. The Committee questioned allocating direct expenses in one budget (merchant fees in City Recorder) and not allocating Personal Services expenses in this budget (Court Manager allocated in Administration Division). Mr. Tuneberg explained that the City allocates direct expenses to the department that manages those activities and Personal Services are allocated through Central Services.
The Committee discussed the $100,000 increase in the bottom line in the past two years. Mr. Tuneberg explained this recognizes the increase of a staff member which before was done by temps and the software conversion. Another increase is in the facilities use fee to maintain the infrastructure. He explained how the facilities use fee is calculated by square footage. He added that the facilities department is now using new software to better account for maintenance.
The Committee questioned the Contractual Services increase. Mr. Tuneberg explained that this is in case they need a judge pro tem in the case of vacations, sick leave, or if the current judge had a conflict of interest and could not perform as judge. Mr. Tuneberg explained the revenue that Courts brings in and that staff time in preparation for cases may exceed that revenue.
Mr. Tuneberg pointed to the Administration Division budget and that this staff puts together the budget and supports other divisions and departments. The Committee questioned the increase in Contractual Services in the last few years. Mr. Tuneberg responded that certain projects and studies have been postponed and rebudgeted in future years.
The Committee discussed this division not expending all of the budget in the last few years. Mr. Tuneberg pointed to the projects not being accomplished for lack of time spent in other areas. In upcoming years, some of these items will not be the responsibility of this department so financial projects can be done, like performance measures.
Lynn Thompson, Committee Member stated that property taxes have been unnecessarily increased when fund balances could have been used. Mr. Tuneberg responded that staff will hold off on increases in fees and rates until the fund balances are known and then utilize those funds.
Mr. Tuneberg spoke to the Accounting Division. He pointed to in 2006, the budget was severely reduced and in 2007, it has been increased. The Committee questioned the Communications line item and fringe benefits. Mr. Tuneberg responded that all of the City’s postage services, except for Utilities, is located here. The fringe benefits change according to staff changes in coverage requirements.
Mr. Tuneberg spoke to the Customer Information Services Division budget. The Committee questioned if automatic web payments could be sent through email. Mr. Tuneberg responded that aspect will be looked into with the software upgrade. The cost of the software will be shown in the Equipment Fund and then paid back by the department.
Mr. Tuneberg spoke to the Purchasing Division. He pointed to a facilities use fee that should be in Miscellaneous Charges and Fees of $16,498, but it is shown in Other Purchased Services.
Mr. Tuneberg spoke to the non operating budgets. He noted that the Band budget has remained flat. He spoke to the grants, miscellaneous write offs for utilities and bad debt, and land purchases and affordable housing that is budgeted here.
The Committee discussed the Capital Improvement section and the Fire Station budget. Mr. Tuneberg explained that it will not be constructed if the bond does not pass and there are no other moneys budgeted for it in another area. If the bond passes and the station only expends a portion, those funds will not be used for something else.
Mr. Tuneberg spoke to Bancroft debt and Notes and Contracts. He pointed to page 3-136 where the General Obligation bonds are shown. He pointed to Interfund Loans, Operating Transfers Out, Operating Contingencies, and Unappropriated Ending Fund Balance. He explained that except for catastrophic events, the City does not spend the Unappropriated Ending Fund Balance.
The Committee questioned policies that in are in place for monetary value for each fund. Mr. Tuneberg responded it is provided in the Appendix section.
The Committee discussed how PERS has been budgeted. Mr. Tuneberg responded that in 2004 additional monies were set aside in the Insurance Fund in an anticipation of a large increase. The departments are paying into PERS and the remainder will come from the Insurance Fund.
The Committee expressed concern that departments are budgeting in excess of what the actuals have been. They suggested the City could look at how to fund additional items that are not in the Proposed Budget. It was suggested that staff look at if there is enough in the total budget to allocate for the proposed positions, not to only look at if the department could provide the allocation for it. The Committee discussed the Central Service Fund and how charges are allocated. The Committee commented that it may be beneficial to have the adopted budgets for prior years to compare to actual budgets. Mr. Tuneberg responded that staff would provide financial statements to the Committee.
The Committee discussed asking departments on what positions they would add and how they will fund them. Gino Grimaldi, City Administrator suggested looking at the City budget as a whole. Mr. Tuneberg added that if a project is cut one year to add a position, the funding source would only be available for that year, not any future years. He reminded the Committee that the unspent monies go to the fund balance and become a resource the following year.
Mr. Tuneberg added that with the Capital Projects, there will need to be borrowings; the ending fund balance could sit in the balance to the next year, so the City does not have to borrow multiple times and incur more financing costs.
Mr. Bond/Mayor Morrison ms to approve the Administrative Services Department budget as presented. All Ayes.
Councilor Hartzell asked if there was any discussion with Departments on what they would cut if they had to and asked if the Department Heads gathered to discuss these possible cuts. Mr. Tuneberg responded that they did not meet to discuss these possible cuts. Departments did look at what programs they could potentially do without, but many of them are programs that are heavy in staff.
Mr. Tuneberg reminded the Committee that the Police and Fire budgets are presented on Thursday, April 27, 2006 at 7:00 P.m.
The meeting was adjourned at 9:11 p.m.