Budget Committee Meeting
CALL TO ORDER
April 19, 2007 6:00 pm
Civic Center Council Chambers, 1175 East Main Street
Chairman Lynn Thompson called the Citizenís Budget Committee meeting to order at 6:02 pm on Thursday, April 19, 2007 in Council Chambers at 1175 East Main Street, Ashland Oregon.
Mayor Morrison was present. Councilor Chapman, Hardesty, Hartzell, Jackson, Navickas, and Silbiger were present. Budget Committee members Bond, Everson, Gregorio, Heimann, Stebbins and Thompson were present. Budget Committee member Levine was absent.
MARTHA BENNETT, CITY ADMINISTRATOR
LEE TUNEBERG, ADMINISTRATIVE SERVICES/FINANCE DIRECTOR
KEITH WOODLEY, FIRE CHIEF
GREG CASE, DIVISION CHIEF-EMS
MARGUERITTE HICKMAN, DIVISION CHIEF-FIRE & LIFE SAFETY
ROBERT COCKELL, FIRE CAPTAIN
WALT ANDERS, FIRE CAPTAIN
TERRY HOLDERNESS, POLICE CHIEF
RICH WALSH, DEPUTY POLICE CHIEF
GAIL ROSENBERG, ADMINISTRATIVE ASSISTANT
BRYN MORRISON, ACCOUNT REPRESENTATIVE
MIRANDA IWAMOTO, ACCOUNT CLERK II
APPROVAL OF MINUTES
Approval of minutes from previous meetings dated:
2/21/07 Budget Committee
3/05/07 and 3/07/07 Social Service Grant Presentations
Bond/Everson ms to accept the minutes as presented. All Ayes.
Martha Bennett, City Administrator and Lee Tuneberg, Administrative Services/Finance Director presented the committee with the City of Ashlandís Budget Message. Ms. Bennett explained that the budget is built upon assumptions approved by City Council and the Citizenís Budget Committee. The assumptions include using the current budget year as a base year, no increases in fees, rates or charges, assuming no new positions with a couple of exceptions. These exceptions include the addition of one Parks position and the conversion of a position in AFN from temporary to permanent status. Itís also assumed any changes in revenue are tied to reality. Ms. Bennett explained that both 5% and 10% cut packages were requested from each of the departments. Most of the 5% cut packages were chosen to be presented to the committee. In addition to the cut packages, each department was also allowed to submit an add package.
Ms. Bennett stated that the City of Ashland, unlike many other municipalities, is fortunate to have a wide variety of revenue sources and that the overall financial outlook for the city is good. She explained that the proposed budget includes reductions in FTE and that staffing is down overall. Ms. Bennett indicated that the General Fund is challenging and that the committee will need to address some of these issues. Ms. Bennett also talked about the major accomplishments of the past year, the budget over time and how the money is distributed between funds (see attached handout). Ms. Bennett stated that the budget up for consideration this year is about 91 million ($91,099,660).
Mr. Tuneberg spoke about the various budget resources and requirements (see attached handout). Mr. Tuneberg explained that one of the Cityís largest revenue streams is property taxes. Looking at the tables on page 5 of the handout, Mr. Tuneberg explained these tables show the different reasons we levy taxes and the comparisons between years. The highlighted areas represent debt service. The non-highlighted areas show where rates are actually determined by the committee. Mr. Tuneberg also spoke about utility rates. Mr. Tuneberg stated that the average impact on a customer is an increase of approximately 2% and that these monies go into the General Fund. Mr. Tuneberg followed up with the different requirement categories (see attached handout) including total monies spent on Personal Services, Materials & Services, and Debt Service.
Ms. Bennett talked about the challenge of trying to balance the General Fund considering that it only makes up about 20% (18.58%) of the budget but that 35% of City staff are funded through the General Fund. She also expressed concern about the long term issues for funds which have a large number of employees. Ms. Bennett continued by explaining the number of staff per department as indicated in graphs (see attached handout).
Mr. Tuneberg explained about Internal Charges which constitute part of the Materials and Services category (Internal Charges are listed under Miscellaneous Fees). Internal Charges are the charges realized when providing services to all other funds. Mr. Tuneberg gave the example of the Finance Department providing billing and collection services for the Cityís Enterprise funds such as Water and Electric. The internal charges for this year were held flat with the exception of Telecom.
Both Ms. Bennett and Mr. Tuneberg discussed the importance of looking at funds long term. Ms. Bennett stated that there has been a decrease in development fees in the General Fund and other funds in the recent years. Additionally, the costs in all funds continue to increase. Ms. Bennett encouraged the committee to evaluate emergency medical services and the demand vs. revenue associated with it.
Mr. Tuneberg provided the committee with a graph showing fund balance projections for the next 6 years (page 10 of attached handout). Based on the information known today the graph indicates future negative fund balances. Mr. Tuneberg told the committee that there is a task force to evaluate the situation and look for opportunities to increase revenue. Regarding the projections, Committee member Everson asked if revenues were held flat and expenditures at inflation. Mr. Tuneberg answered that they took anything that had a trend of growth and added roughly 2%, staffing was continued at a 5% increase, and Materials and Services was held at 2%. Revenues were held flat.
Ms. Bennett reported that General Fund revenues are down and that there has been a decrease in all of the revenues associated with construction and development activity. Ms. Bennett explained that construction and development revenue is less than half of what is was last year. In addition, ambulance revenues are flat but emergency calls are up. Meanwhile, the salary, health insurance and inflation costs in the General Fund have increased. To balance the budget of the General Fund, positions have been reduced by 3.37 FTE which affects 5 different people, 3 from Community Development and 2 from Fire. Budgeted overtime has also been reduced. Ms. Bennett reported that even with these proposed budget cuts, General Fund expenditures still exceed revenues by about one million dollars. Ms. Bennett also gave a summary of the General Fund balance over time. In recent years, the General Fund revenues have exceeded expenditures. However, if the current trends continue then the General Fund expenditures will exceed revenues in the future.
Ms. Bennett addressed the add packages and provided a table prioritizing the proposed additions (page 13 of attached handout). Ms. Bennett advised that if these additions are chosen to be added back into the budget, then the committee will have to make cuts elsewhere, find new revenues or spend down.
In summary, Mr. Tuneberg stressed the importance of looking into the future and at the long term issues of the funds. He also expressed his gratitude for all of the hard work the committee does and to the employees for all of their time and effort putting the budget together. Mr. Tuneberg also thanked his staff for all of their countless hours of work.
Committee member Gregorio inquired about the cost of service study. It was answered that due to work overload and understaffing, it has not been completed.
The committee questioned statements made about the challenges of funding staff since operating budget numbers reflect small increases in Personal Services. The committee was told that the operating budget numbers take current staff vacancies and future staff cuts into consideration. It was also reported that Personal Services includes health premium increases and that all City of Ashland employees pay 5% of medical premiums.
Councilor Hartzell asked about the AFN debt and how that was affecting the budget. It was answered that about 1/3 of the debt is being paid by AFN and the rest is allocated between the larger funds such as the General Fund and Enterprise Funds.
Councilor Hardesty pointed out that although less utility use equals less revenue, that isnít necessarily a bad thing in terms of conservation.
FIRE DEPARTMENT PRESENTATION
Keith Woodley, Fire Chief, Greg Case, Division Chief-EMS and Margueritte Hickman, Division Chief- Fire & Life Safety presented the Fire Department presentation. Mr. Woodley opened by explaining about the 3 divisions of the Fire Department and the responsibilities of these divisions (see attached handout). Mr. Woodley explained that the Fire Department is responsible for providing ambulance service for 650 square miles, from the border of California to the northern limits of Talent. The State of Oregon establishes these ambulance service areas and emergency medical services must be provided for this area.
Mr. Woodley also spoke about the goals of Ashland Fire & Rescue. He spoke about reevaluating Fire Station 2. He stated that they are currently meeting 4 of their 6 performance goals. The goals not met are fire emergency response time (must respond within 5 minutes for 90% of calls) and human resources/training. However, the Fire Department is responding within 5 minutes for 74% of the calls and are also providing staff with 2000 hours of training per year. The two performance measures were not met because of work overload.
Mr. Woodley was pleased to report that Ashland Fire & Rescue did receive a $312,000 FEMA Grant for a Live-Fire Training Trailer. The trailer should arrive in June and provide firefighters with live fire without burning any structures in Ashland. Other goals mentioned were implementation of the Domestic Vegetation Management Ordinance and a business fire safety inspection program.
It was explained that some of the increases in expenditures to the budget were not within the control of the Fire Department. These expenses include the Fire Departmentís share of AFN debt, increased fuel costs, 911 Dispatch Contract, Physician Advisor Contract and an increase in bad debt with regard to the ambulance revenue receipts.
In order to meet the 5% cut in this yearís budget, the Fire Department has chosen to reduce CERT program funding, scheduled overtime, and employee training. The CERT program has been reduced by $112,308. Mr. Woodley reported that the CERT program remains viable with these cuts but that it does not permit future program expansion. The CERT program is being scaled down from a 1.0 FTE to a .63 FTE, of which .5 is grant funded. Scheduled overtime will also be reduced for special events such as the 4th
of July, Halloween, and SOU Career Day. The third reduction is in employee training.
Mr. Woodley reported that the Fire Department retained as much life safety as possible but that there will still be an impact in service. The impacts from these cuts in service are outlined in the Ashland Fire & Rescue handout (see attached). One of the impacts listed is that confined space rescue will not be provided. Confined space rescues are specialized rescues such as entering a sewer manhole, the tunnels under SOU, or going up to the Cityís watershed. The committee started a discussion on confined space rescue.
Fire Captain, Robert Cockell, reported that the confined space rescue team was established in 2003. It is a 9 member regional team with very high levels of training and standards. It requires 2 hours of training per month and 10 hours in spring, summer and fall. Councilor Hartzell asked if it would be illegal to respond to a confined space emergency. Mr. Cockell reported that without proper training, confined space rescue would be illegal due to OSHA guidelines. It was reported that Eugene is the next closest team available. Councilor Chapman asked if everyone on team had to be certified. The response was that it was best if everyone was certified because of different shifts and changing positions.
Councilor Jackson asked whether or not all or just a portion of scheduled overtime will be cut. It was reported that a portion of both teaching and training hours will be cut.
It was asked if District 5 offers 4th
of July support. It was reported that District 5 does offer support and that the Forest Service manages their land.
The Fire Department proposed increasing revenues by charging a $250 response fee. Itís estimated that would generate $50,000 a year in revenue. Fire Department foresees situations in which there will be ramifications with the aforementioned fee.
It was also reported that pursuing more grants would be a way to increase revenue. Mr. Woodley stated that additional grants are not a permanent solution and usually do not cover operational fees.
It was discussed whether or not sharing emergency responsibilities with a private ambulance service would be cost effective. It was reported that although the savings in expenditures would be significant, so would the loss of ambulance revenue, resulting in balancing itself out. It was also reported that usage of a private ambulance service would result in a decrease of current service level.
Councilor Chapman asked where the revenue comes from and why if service calls are up that revenue is not increasing. It was reported that revenue comes from Medicare, and that Medicare reduced ambulance reimbursements. Additionally, rural areas now get a subsidy and that has decreased revenue. Although the call volumes increased, the revenues became flat. The demographics provided were that 57% of patients are on Medicare. It was reported that Medicare patients pay 47% of what is charged and it is illegal to bill for the remainder. Mr. Case reported that 8.8% of those transported are on Medicaid and that the Fire Department realizes 1/3 of the revenue from those bills.
Committee member Everson asked whether the cost is the same for both responding and transporting. It was reported that emergency responders need to have the same equipment regardless and therefore, incur same costs but donít get the revenue if the patient is not transported.
Councilor Hardesty asked if a smaller fee for those not transported had been considered. Mr. Woodley reported that the $250 is industry standard and with the paperwork involved it would not be cost effective to charge less. Councilor Hardesty also asked whether the department had considered hiring just EMTs without also being a firefighter. It was stated that other agencies have done this and are not seeing a cost savings benefit.
Committee member Stebbins asked if there is a fee schedule based on specialized service/rescue. It was stated that there isnít at this time but that it is reasonable to look at that option.
Councilor Hartzell asked what criteria was used to propose these budget cuts instead of in areas where service need is down. It was reported that the Fire Department decreased all of their Material and Service line items as much as possible but still had to look elsewhere. Mr. Woodley stated that the priority was to hold on to emergency services. It was also reported that the Wildfire Prevention position created in recent years is being paid from a different budget and therefore, has no bearing on the Fire Departmentís budget.
The committee also asked about the Plans Reviewerís increase. Ms. Hickman reported on the responsibilities of that position. Oregon state law requires plans review for water supply and access, to investigate fires and to provide life safety inspections of buildings. Plans review takes more time because of increased code requirements on properties. It was also reported that citizens have complex questions which takes a lot of staffing time. Ms. Hickman stated that the Fire Inspector position is fully funded through Community Development fees.
Everson/Gregorio ms to approve the Fire budget as presented. All Ayes.
Recess until 8:30.
Ms. Thompson encouraged the committee to discuss whether or not they would like to ask departments to present alternative solutions to the proposed budgets at the time of presentation. Ms. Everson mentioned that itís hard to understand the impact on other departments without hearing about them first. Mr. Heimann suggested additional meetings after presentation to evaluate changes. Ms. Bennett reminded the committee that they have 2.5 meetings at end of process to discuss and evaluate the entire budget and that adding more meetings is an option. Ms. Bennett told the committee that any questions or information needed by the committee should be asked for and that the department is responsible for giving it to them. At the end of the discussion, it was determined that the committee needs to be proactive and provide feedback so that they can get the information needed to make decisions.
Ms. Everson asked Mr. Woodley for an explanation on vacant position. Mr. Woodley responded that Division Chief -Operations is open and he has been advised to wait until spring to advertise position with hope that it would be filled by 8/1/07.
Mr. Gregorio requested that the Fire Department provide the committee with a list detailing their $400,000 carryover.
POLICE DEPARTMENT PRESENTATION
Police Chief Terry Holderness, Deputy Police Chief Rich Walsh and Administrative Assistant Gail Rosenberg presented the Police Departmentís budget. Mr. Holderness opened by talking about the major responsibilities of the City of Ashland Police Department (see attached handout). Responsibilities include dealing with general crime and disorder, solving community problems, traffic safety and assisting with major City events.
Mr. Holderness continued by discussing the 3 different divisions of the Ashland Police Department (APD). APD is made up of an Administrative, Operations and Support Divisions. The Operations division makes up 59% of the budget, Administration constitutes 17% and Support is 24% of APDís budget (see attached handout).
Mr. Holderness listed the major accomplishments of APD. The list included re-accreditation with Oregon Accreditation Alliance (cost $1500), new association contract for 3 years, relocation of repeater to improve radio communications and reorganization to improve accountability.
It was reported that the Part 1 crime rate has declined. Part 1 crime is identified as rape, robbery, homicide, larceny, arson, auto theft and aggravated assault. Part 1 crime rates are the standard used when comparing statistical information with other municipalities. Mr. Holderness reported that the vast majority of crime in Ashland is property related and that the city has a very low violent crime rate.
For FY 2006-2007, APD had a lot of staff vacancies and therefore have projected a $400,000 carryover. The $400,000 carryover also includes employee training monies. The 2007-2008 proposed budget consists of 69% for Personal Services, and 31% for Materials and Services. It was reported that the majority of the 31% is for the Medford Dispatch Contract and that personnel costs would be much greater if APD ran their own dispatch.
Mr. Holderness reported that changes to the Police Departmentís current 2006-2007 budget includes cutting the Youth Diversion Officer (YDO) position, delaying the of hire of 4 Corporals, 1 Lieutenant and 1 Police Officer until January of 2008 and reducing employee overtime.
Significant proposed budget changes for FY 2007-2008 include cutting the additional $15,000 requested for employee training recommended by the PERF report. The department has budgeted $30,000 in training for this year which is an increase from the previous year. The increase is to make up the training shortfall from last year. APD also proposed cutting the additional $28,000 in Materials and Services originally requested. The monies were requested so that the mobile data computers (MDC) could be replaced. APD has budgeted $33,000 for MDCís for this year and all of them will be replaced. It was stated that MDCís provide officers with all of the information needed in an emergency situation and allows staff to provide higher level of service.
Councilor Hartzell asked about the addition of a School Resource Officer (SRO) vs. cutting the YDO position. Mr. Holderness stated that the cost of an SRO vs. YDO was very similar. Therefore, the department chose to add an SRO because a police officer can fulfill the responsibilities of a YDO and also patrol making it more cost effective. It was also reported that adding back the YDO position in addition to having an SRO would be ideal.
Mr. Holderness listed the service impacts of the proposed budget cuts (see attached handout). The list includes reduced field supervision, loss of YDO program, and slower response time.
APD reported that the challenges for FY 2008 include implementation of PERF report, negotiation for new dispatch contract, implementation of the SRO program and development of a downtown contact station. APD would like a downtown contact station to deal with the disruptiveness in the plaza area. It was reported that the goal is to help people feel safer, have better relations with the merchants and also with the youth who are hanging out downtown. The amount budgeted for the downtown contact station is $4000. Councilor Navickas asked about the low cost for the station. It was reported that a private property owner is providing a physical location for the station.
Councilor Chapman inquired about grants and the option of looking into grants for public safety. Mr. Walsh stated that they would like to look into it but havenít had the staff available. It was also reported that a lot of money is now going to Homeland Security and might not be available. Homeland Security funds are granted to the county and then spread throughout. It was reported that the funds also have to be spent very specifically and not on staff.
The committee questioned why the Computer Tech position was still in the police budget since it had been moved to a different department. It was explained that APD still funds half of that position because, although the person has physically moved over to technology services, they still provide service to the Police Department. The General Fund and Telecommunication Funds each are charged half.
Councilor Hartzell inquired about a new dispatch contract and the cost associated with it. It was reported that negotiations havenít started and cost is unknown at this time.
Councilor Jackson left at 9:24 pm.
Councilor Navickas stated that he is opposed to the downtown contact station.
Chapman/Hardesty ms to tentatively approve Police budget as presented. Bond, Chapman, Everson, Gregorio, Hardesty, Heimann, Morrison, Silbiger, Stebbins, and Thompson approved. Navickas and Hartzell opposed. Motion passed 10 to 2.
The Citizenís Budget Committee meeting was adjourned at 9:31 pm.
Account Clerk II