MINUTES OF THE JOINT ASHLAND CITY COUNCIL
PARKS & RECREATION COMMISSION
February 1, 2011
1175 East Main Street
CALL TO ORDER
Mayor Stromberg and Park Commission Chair Eggers jointly called the meeting to order at 6:00 p.m.
Councilor Chapman, Morris, Lemhouse, Slattery, Silbiger, and Voisin were present. Park Commissioner Landt, Lewis, Eggers, Seffinger, and Rosenthal, were present.
PUBLIC INPUT – None
AGREEMENT ON PROPERTY TAX SPLIT FOR FY 2012 BUDGET PREPARATION
City Administrator Martha Bennett provided background on the Budget Committee decision to have the elected bodies meet to determine the spilt of the permanent rate for property taxes. The current split of $4.2865 levied between the agencies for Fiscal Year 2010-2011 directed $2.09 to the Parks and Recreation Fund, with the balance going to the City’s General Fund and $0.175 of the City’s balance towards the Technology Debt. Ending Fund Balances for both the City and the Parks and Recreation Department for Fiscal Year 2010 exceeded what was budgeted. The recommendation was the Parks and Recreation Department continues receiving the $2.09 split, and both agencies transfer the Ending Fund Balance overages to the City Reserve Fund. Those amounts totaled $361,906 from the City General Fund and $348,595 from the Parks and Recreation Fund due to unanticipated revenues and lower than anticipated expenses, that occurred in both funds. The City Reserve Fund would serve as a savings account available to both the City and the Parks and Recreation Department in the event of an emergency.
Commission Chair Eggers expressed concern on how the Parks and Recreation Department could access the Reserve Fund and if the funds were separate from each other.
Ms. Bennett explained the Reserve Fund could not be spent in the current fiscal year and was accessed through the budget process, and currently funds were not segregated. The process to access the Reserve Fund was the same process for other funds, handled as a request for transfer of reserves during the budget process.
Administrative Services Director Lee Tuneberg confirmed it was possible to place the funds into a temporary restricted net asset account assigned to the Parks and Recreation Department.
The Commission was interested in separating funds so Parks and Recreation Department would have its own reserve fund and the City would have theirs. A concern was the lack of control over Administrative Services Charges. Staff explained City and the Parks and Recreation Department purchase services from each other and recommended scheduling a future meeting on internal service charges. The City Council had ultimate control of funds as part of the Budget Committee and as the governing body had the authority to adjust adopted budgets. This recommendation was a one-time transfer and it was prudent to set monies aside when there were Ending Fund Balance overages to cover future financial crises.
The Commission commented on the policy adjustments made in response to recent issues in the paper to safeguard taxpayers’ funds relating to the Parks and Recreation Department.
They went on to share information on how the Parks and Recreation Department increased developed parkland 83% since 1989 and increased full-time equivalents (FTE) only 22%. The Commission thought there were ways to decrease maintenance costs through efficiency gains while build-out costs increased. Overall, the Commission supported the $2.09 split but had concerns transferring overages to the Reserve Fund.
Mayor Stromberg explained having a stronger reserve fund made the City eligible for lower interest charges and used the Parks and Recreation Department going out for a Bond on the Meals Tax as an example. Mr. Tuneberg added a sufficient reserve was required to make debt service payments when dealing with Full Faith and Credit bond issues or borrowing.
Council supported transferring overages to the Reserve Fund but preferred not segregating funds. The
Memo of Understanding (MOU) indicated both agencies needed to ensure they received sufficient funds through the Budget Process to deal with possible changes. It was the Parks Commission and City Councils responsibility to be as efficient as possible with taxpayers’ money. A Council concern questioned having a Reserve Fund that made very little interest while paying a debt at 5%.
Ms. Bennett explained that was why staff provided other alternatives to move the money either into the Insurance Fund or into the Debt Service Fund. However, staff did not recommend the Debt Service Fund option because the Parks and Recreation Department had never paid towards the Ashland Fiber Network (AFN) debt. She went on to use the 2008 cuts due to the recession as an example when to access Reserve Funds. Having a Reserve Fund at that time might have reduced mid-year lay-offs or possibly allowed attrition instead. Other examples included natural disasters of any kind.
The Commission was hesitant to transfer the overage to a Reserve Fund without further understanding the process to access the funds.
Staff explained the long-term goal for the Reserve Fund was to have $6million to assure financial stability and have the fund function properly. Staff anticipated it would take up to 10 years to grow the fund. This request to transfer the overages specifically addressed the Ending Fund Balance of Fiscal Year 2010.
Councilor Voisin/Lemhouse m/s that Parks and Recreation prepare the FY2011-2012 budget with a property tax rate of $2.09 per thousand. That the City will transfer approximately $360,000 from the General Fund and $349,000 from the Parks & Recreation Fund to the Reserve Fund.
DISCUSSION: Commissioner Landt thought the motion addressed two different issues. Mayor Stromberg explained they were tied together. Ms. Bennett added that it preserved the $2.09 for the Parks and Recreation Department, ensured fiscal capacity to continue and contributed to a Reserve Fund available to everyone over time. She recommended not applying different rules to the General Fund. The Parks and Recreation Department would have the same access to the Reserve Fund as the City if they met the criteria and there were no special access rules with the motion. Roll Call Vote: Councilor Silbiger, Chapman, Voisin, Slattery, Morris, and Lemhouse, YES. Motion passed.
DISCUSSION OF SERVICES AND COSTS SHARED BETWEEN THE CITY AND PARKS AND RECREATION
Staff will set a time for a Joint Study Session in the future.
Meeting was adjourned at 6:50 p.m.
Barbara Christensen, City Recorder
John Stromberg, Mayor