CALL TO ORDER
May 16, 2011 6:00 p.m.
Civic Center Council Chambers, 1175 East Main Street
The Budget Committee was called to order at 6:00.
Mayor John Stromberg, Committee Members Keith Baldwin, David Chapman, Dee Anne Everson, Douglas Gentry, Greg Lemhouse, Michael Morris, David Runkel, Russ Silbiger, Dennis Slattery, Roberta Stebbins, Lynn Thompson and Carol Voisin were present. Committee member Chuck Keil was absent.
The Committee went through a debrief process on what worked, what did not, what they would you like to do differently next year.
Mr. Baldwin stated he would like to see the Committee spend less concentration on the details of the enterprises and departments where their vote and input does not have a lot of influence. Ms. Everson added that if the Committee is going to talk about water, electrical and CIPs, would like it to be high level and first, then end on Administrative and General Fund (GF).
Ms. Thompson liked the Public Works (PW) presentation and that it was more focused on enterprise funds and their health and it is important for the Budget Committee to understand.
Mr. Runkel would like more discussion at the opening session on the revenue side of things and see any revised revenue figures before making a final decision. This year the Committee learned halfway through the tax discussion that there were additional revenues coming in and that was after they had already voted against hiring a policeman, a fireman, and conservation manager. It would be helpful to know the week before a final decision that new revenue estimates are available.
Mr. Gentry acknowledged the Committee did spend time on department detail, but had hoped to come across financial ratios and measures to compare overall how the City’s finances are working. Would like discussions to be more at that level; how is each fund operating, are they meeting the targets, how are they performing against benchmarks, where are the revenues, the costs, and what should be done about taxes. Found the Roseburg comparison study interesting.
Mr. Lemhouse liked the Add packages being clearly defined and separated out of the budget. Makes it easier to conceptualize and determine how they fit into the Budget. Would like to take some time at the end to clarify the issue about Urban Renewal money and likes it separate and considering it on its own.
Mr. Baldwin added that he liked the performance measure tables setting forth how the City is doing and what the goals were for next year. They were terms he could understand in measurable things.
Ms. Thompson appreciated the transparency in areas of the Budget where changes were made and staff made sure the Committee was aware of those changes. Believed it was important to the creditability of the process.
Mayor Stromberg thought it was a successful budget experience. The Committee is trusting of the staff and department heads and has a good working relationship. For that to continue, the underlying structure that is expressed in the basic assumptions by which the Budget is put together and the various constraints, assumptions and priorities that are used within those constraints and performance measures, needs to evolve and go farther, particularly the criteria needs to be as creditable and intuitive as possible. This will take more work on the actual indicators of what results are being produced for these budget expenditures. Comm. Dev has a hard time with presentation delivery and why they prioritized like they did and why they applied the resources like they did. He liked the Roseburg water comparison and would like to take another fund next year and do another comparable city comparison. Would like the following variables laid out and explained at the first budget meeting next year: contingencies, under spending, working capital, reserve fund, ending fund balance, restricted funds etc. So they understand how those areas interact with each other and what their purposes are.
Ms. Stebbins thought it was a very collaborative process. She asked how the staff felt the process went. Mr. Tuneberg thought it was a good process and every time a budget gets approved is a success. We didn’t talk a lot about the numbers and didn’t get into details. Wondered how comfortable the Committee is with information from each department. Assured the Committee that Ms. Bennett does a great job in advance and she asks all the really hard questions of staff. Looking for analysis and benchmarks to another industry may not work as well for the City. There are 18 funds and they represent many businesses and industries. Sometimes it gets lost when comparing across funds and for the overall health of the City.
Ms. Bennett thought it went well and was more collaborative. She wondered if it was because the City is in a slightly stronger financial position than in the past few years. Appreciated the Committee’s engagement on the performance measures and have been pushing the departments to talk about what they are achieving in the Community. Next year, in addition to reconciling the criteria with the performance measures, as it is a missing link, would like the Committee to be asking department heads how the budget they purpose relates to the outcomes and what alternatives were examined to accomplish those outcomes in the most cost effective manner. Talk about how they have looked to spend money in the most efficient way. Also, is not in favor of benchmarking other communities.
Mr. Lemhouse appreciated the diversity of the individuals on the Budget Committee, they are able to look at the broader overview of issues, making the process more productive and have respectful discussions.
Mr. Baldwin would be interested in the numbers that beg the questions that Mr. Tuneberg referenced. Expressed confidence in staff to bring issues to the Committee’s attention and those that require more discussion.
Mr. Slattery thought it was a good process and the Committee does a good job year to year. He felt unsettled as the Committee looks forward to the years to come and how can the Community continue to advance the cost of government year after year. There is a need to look beyond present year. How is it determined that the City is using every dollar the way it needs to be used. Is the City getting out of those dollars what they should be getting? Is there something the Committee can do to address the ever increasing cost of government?
Mr. Chapman commented that he has trouble with the budget process, he appreciated his fellow, knowledgeable Members, and is frustrated about all the time he spends on this process and cannot effect any change.
Ms. Voisin stated she believed the State Legislature was sagacious when they set forth Citizen Budget Committees. She expressed appreciation to the citizen’s on the Budget Committee and believes it is important to the City to have citizens on the Committee.
Mr. Morris noted this was his first year on the Committee. Is confused about the performance measures and cannot figure out how the City gets from the dollars to the results. He found the presentations and numbers confusing. Expressed disappointment that the Conservation Manager position did not go forward. Would have liked to see it funded differently and is considering proposing some changes.
Mr. Silbiger said he found it helpful to compare this year’s Budget to five or ten years ago. He believed the process is better, but the performance measures are not tied to anything and thinks that is the next step. Trying to figure out how to get government to cost less than the Cost of Living.
Mr. Runkel questioned the decision to put money into the Reserve Fund and allocation of the Lodging Tax money. The decision happened months before the budget process began and thinks these are budget issues. The Council passes a Resolution and acts before it gets to the Committee and would like to know how that happens.
Ms. Stebbins expressed a concern that the narrative states there is no reserve fund balance policy. She likes reserves, but does not think it should be open ended.
Ms. Everson noted that Ashland does not have a large Reserve Fund compared to Medford or Jackson County. Would like to see a Chief Strategy Officer tying performance measures and outcomes together. Was surprised the Conservation Manager did not pass, as it’s a Citizenry and Council goal. She expressed appreciation to staff and recognized the massive amount of work it takes to put the budget book together and the support given to the Committee. Would like staff to tell them what items beg to be questioned.
Mr. Tuneberg noted that the budget message gives an overview of what staff thinks is important for departments to discuss. There was Committee discussion on other things that were less telling and other things departments could have told them. Mr. Tuneberg expressed surprise that less questions were asked about the amounts in the budget.
Ms. Bennett advised that the Council had set a goal to adopt a biennial budget. A handout was provided to the Committee setting forth State Guidelines for local jurisdictions that move to biennial budgets.
Mr. Tuneberg presented the Chapter 14-Biennial Budgets document published by the Dept. of Revenue and oversees the budget processes (3-page handout). It outlines things to take into consideration and how to do it. It compares the 2-year budget you build compared to the one year prior budget. He addressed the other item which is a draft response to the Council goals of going to a biennial budget (see handout). Some foundation items include: the Board passes a resolution or charter amendment going to a 24 month budget, change the membership of the Committee with one-quarter of the Members going off every year, the process must be revised to accommodate the two-year period, the Committee would set the property taxes looking out two years in the year that they meet and discuss the budget. There would be staff researching other agencies to learn how it has worked for them, restructure the budget document, develop a budget calendar and determine what tools staff could utilize to get better numbers going out for the 2-year period. A second year goal with Budget Committee time freed up, is that they will be able to focus on outcomes and financial policies to give feedback to elected officials.
There was Committee discussion on second year recommendations to elected officials, decisions and adjustments to the budget, including tax increases. It was determined that the tax rate set in the second year budget cannot be increased, but could be decreased.
Mr. Gentry expressed that he likes looking further out in a biennial budget and not just short term. However, believed this will be a big challenge as there is more control over forecasting expenses, but is concerned how revenues will be estimated and would the budget process be accurate enough on a 30 month basis.
Ms. Thompson expressed concern about extending out to a 2-year budget cycle would give them no ability to make course corrections and it may press the Committee to over tax. As a Citizen Member, she holds on to the opportunity to be involved in a way where she is able to help make decisions and not just be a policy advisor every other year. Not sure she is qualified to give advice on financial policies and it is not clear that there is a lot of value there for this Budget Committee.
Ms. Stebbins felt it marginalizes the value of the public member of the Budget Committee. Our value as public members has to come from a more immediate perspective. Example is to set a tax rate as immediately as we can with the most current figures to have any value.
Mr. Lemhouse spoke in favor of it. Works with both budgets and sees the pros and cons of both. He noted adjustments do occur in between the first and second year if they have to. It is not uncommon to get direction that there needs to be cuts coming into the second year of the biennium because forecasting is being done and the forecast looks gloomier than the it did in the first biennium. Operationally, it is easier to do a plan for two years; acknowledging the enormous amount of work performed by City staff. Planning for what the mission is going to be instead of executing the mission. Setting a two-year budget gives clarity going forward, with adjustments as you go along. Philosophically, you are forcing government to live within its means for long term. Gives the citizens some predictability for a longer term. Believed the interim years are the strength of this idea. An example is that the Committee has not had the time to discuss what should an EFB policy be and welcomes the citizen members’ input.
Mr. Slattery stated he opposes a biennial budget. He believed the off year discussions should be accommodated every year. The three pieces involved are the staff with deep, intimate knowledge of how the City’s money is spent, the Council has incremental knowledge and policy making and then there is the Citizen Budget Committee that comes together once a year to give oversight. The State biennial budget is now being broken down into one year budgets. Would like to be provided with the potential dollars and cents efficiencies prior to this being discussed again. Believed it is important that department heads reflect on their budgets every year. This is a move that needs to be seriously thought out before the City takes that step. He added that it would take Budget Committee members going through two cycles and it takes a few years to really get up to speed.
Mr. Silbiger advised he was somewhat in favor of a biennial budget. The Budget Committee should be accurate enough and this will require more discipline to get it right. Viewed the Budget Committee being able to have much more engagement in discussions and making recommendations for policies; such as the EFBs.
Ms. Stebbins would have liked to have had discussions about policy changes affecting this budget before they got into the process and should be handled every year with an extra meeting.
Ms. Everson expressed that she is in favor of the biennial budget. She believed the short term budget is one of the reasons the fund transfers keep happening. This became a Council goal without talking about it at the Budget Committee and it is too late to have this conversation, but is supportive of it and believed it to be a good move for City services.
There was Committee discussion on the process and adoption status of the biennial budget. It will be an ordinance or a resolution which will be a Council agenda item. Council will have the option to change its goals. Staff will do research on other jurisdictions to get lessons on its merits. Committee should meet in the Fall to discuss assumptions to better prepare departments heads and staff.
Ms. Everson asked for other issues and suggestions and it was the consensus of the Committee not to schedule meetings during Passover.
The Committee thanked staff for all the hard work. Mr. Tuneberg thanked the departments and staff.
The Budget Committee meeting was adjourned at 7:22 p.m.
Temporary Administrative Secretary