Agendas and Minutes

Citizens' Budget Committee (View All)

Citizens Budget Committee Meeting

Minutes
Thursday, May 07, 2015

Budget Committee Meeting
Minutes
May 7, 2015 6:00pm
Civic Center Council Chambers, 1175 East Main Street
 
 
CALL TO ORDER
The meeting was called to order at 6:00pm
 
ROLL CALL
Present:
David Runkel 
John Stromberg         
Greg Lemhouse (arrived at 6.28pm)
Rich Rosenthal                                  
Pam Marsh                            
Mike Morris
Carol Voisin    
Stefani Seffinger
Mary Cody
Garrett Furuichi
William Gates
Pamela Lucas
Shaun Moran             
 
Absent:
Traci Darrow
 
Other Attendees:
Dave Kanner               Budget Officer/City Administrator
Lee Tuneberg              Finance Director
Kristy Blackman         Administrative Assistant
 
APPROVAL OF MINUTES DATED:
 
M/S
Rosenthal/Marsh
That the minutes of the February 19, 2015 Budget Committee Meeting
be approved as presented.
All Ayes
APPROVED
 
REVIEW OF CALENDAR
Tuneberg outlined the budget calendar;
 
May 7, 2015
  • Police
  • Parks
 
May 11, 2015
  • Administration                                    
  • Administrative Services                     
  • City Recorder                                    
  • Fire                                                     
  • Electric/It                    
 
May 14, 2015
  • Community Development
  • Public Works
 
May 21, 2015
  • Motion to Approve the Biennial 2013-2015 Budget
  • Approval of Grant Process and Allocations
  • Wrap Up
 
Voisin submitted a verbal request to speak to an add package that she wished to present directly after the City Administrator and Finance Director presented the Budget Message.
 
PUBLIC INPUT
The following members of the public spoke during public input in support of Voisin’s add package being the proposal for a Solar Energy Park
 
  • Steven Maryanoff, 654 Oak St, Ashland OR 97520
  • Elizabeth Pachen, 865 Oak St, Ashland OR 97520
  • Gerry Paschen, 865 Oak St, Ashland OR 97520
Paschen asked if the City Of Ashland is under a long term contract with Bonneville or Pacific power?
  • Abraham Wylie Bettinger, 779 Oak St, Ashland OR 97520
  • Louise Shawkat, 870 Cambridge, Ashland OR 97520
  • John Hutter, 355 High St, Ashland OR 97520
  • Eric Hansen, 349 Alta St, Ashland OR 97520
  • Elizabeth Hallett, 938 Meadows Circle, Ashland OR 97520
  • Huelz Gutcheon , 2253 Hwy 99, Ashland OR 97520
 
 
BUDGET MESSAGE                                   
Kanner spoke to the budget message and noted that the budget is balanced. He used the aid of a slideshow and outlined the budget process over the month of May requesting that the budget members read their materials thoroughly and reminding them that they have the ability to adjust or modify the budget during this process. He then outlined the four duties of the budget committee required by Oregon Law;
  1. Receive the budget message;
  2. Review the budget and provide members of the public and opportunity to comment on the budget;
  3. Establish City’s property tax rate;
  4. Approve the budget.
 
Kanner outlined the proposed increase of the City’s tax rate which is the maximum allowed by Oregon Law. This would mean an increase of the tax rate of 8.92¢ per thousand dollars of assessed valuation equally approximately $205,000 per year, of which $175,000 would be used for ongoing maintenance of the Ashland Watershed.  The remaining $30,000 would be allocated to the Fire Adapted Communities Program (FACP). He noted that in the current biennium the City appropriated $175,000 a year for the Ashland Forest Resiliency (AFR) project; however the budget committee in 2013 assumed rather than identified a revenue source for this. He explained that the money was there because the beginning fund balance in the water fund was overestimated. He cautioned the committee against this scenario again and that a revenue source would need to be identified.
 
Kanner noted that staff had directed the City Council to develop a resolution imposing a Utility Billing Surcharge to raise money for the AFR project but not for the FACP at $175,000 per year. If this resolution is passed the property tax rate increase will not occur. The budget would then be adjusted accordingly.
 
Kanner noted that there are many areas of concerns in the budget and they would be outlined.
 
He explained an error with AFR fuels reduction work noting it was budgeted on the revenue side but not been appropriated on the expenditure side and in order to correct this it will be budgeted in the General Fund (GF). This will bring the GF balance down from $1.4 million to just over $1 million including contingencies.  
 
Kanner gave further overview of the budget as outline in the budget message.
 
Tuneberg gave a brief overview of the budget as presented in the budget using the aid of a slide show concentrating on;
 
  • Operational and capital costs in the introduction
    • Explanation of internal fund transfers
    • Debt service
  • Budgetary requirements
    • Operating costs
    • Capital costs
    • Requirements
  • Unappropriated ending fund balance (EFB)
  • Resources
    • Intergovernmental revenues
    • Charges for services
  • General fund revenues
    • Enterprise funds
    • Street fund
    • Taxes
    • Utilities (outlined rates and impacts)
 
Tuneberg explained possible disconnects and the role of the reconciliation sheet that will contain these corrections.
 
Kanner resumed and noted that franchise fees will not change this biennium. He went on and outlined proposed positions in departments explaining that even with the new positions the City will still have fewer positions that in 2008 regardless of higher staff demand.
 
Kanner explained the proposed transfer of funds out of the Insurance Fund to pay for proposed projects noting that this was money that was set aside in the current biennium to cover what was an anticipated increase in the Public Employee Retirement System (PERS) expenses. Instead PERS expenses are flat and therefore these funds are available for other expenditures which are outlined on page 1-3 of the current proposed biennium and goes into more detail again on page 1-12.
 
Kanner drew attention to page 1-7 of the current proposed biennium and the priority City council goals that were identified last year and how this budget proposes funding for those goals.
 
Kanner discussed the Health Benefits Fund (HBF) and pointed out that in the first year of the 2013-15 biennium the City had a very bad claims year but noted that in the second year it was looking much better. He noted that because of this it might be necessary to transfer some funds from the Insurance Fund (IF) to the Health Benefits Fund (HBF) to ensure the fund balances.
 
AREAS OF CONCERN:
 
Electric Fund - (EF) has experienced a sharp decline in revenue regardless of a rate increase and this was due to warmer than normal winter weather and referred to a chart.
Tuneberg explained that causes are;
  • Weather
  • Conservation program
 
Kanner noted that the councils 4.5% rate increase for 2015-16 only covers the operating costs. If there were a rate increase which included repairing the EF balance, which was affected by the warmer weather, the City would have needed a rate increase of approximately 7.5%. He noted that this is something that the City may need to reevaluate in the future.
 
Water fund - (WF) Water use was down due to conservation efforts which resulted in a decrease in revenues. Had sales remained constant, the City revenues would have increased 10%. Tuneberg presented a graph explaining this in further detail.
 
Municipal Court - Kanner pointed out that expenditures have increased and income has decreased significantly and noted this is unsustainable. He explained that current biennium projections show court expenditures will outpace revenues generated by fines and charges, by $125,000 and then $256,000 in the following biennium. He also pointed out that the Municipal Court is and was created as a convenience for citizens and raised the issue of a discussion to go to council regarding whether the court is a department which can be sustained at these levels.
 
Parks and Recreation - (P&R) The P&R budget balances on paper however this is with a $550,000 transfer over and above current transfers and this money was not anticipated to be used in the current biennium. The determination from the initial request from P&R was that they would require a general fund transfer of $2.15¢ per $1,000. A request was also submitted for $439,000 to purchase new vehicles and equipment. These requests were submitted prior to compilation of budget data from all departments. It was discovered immediately that the $2.15¢ would not suffice as well as the $439,000. Kanner proposed that a loan of $439,000 from the City’s Equipment Fund to be repaid at $88,000 per year for 5 years beginning the second year of the biennium. This reduced their request by $351,000. Kanner pointed out that while this addressed an immediate need it does not meet a long term one because P&R would like to establish their own equipment fund which would be the same as the City which Kanner supports. In order to have this they would need $359,000 per Biennium. Kanner noted that isn’t possible this biennium and they must defer purchases for a number of years to get the fund established. The City asked Black to identify approximately $200,000 in cuts which he did and which then resulted in a negative fund balance totaling $530,000. Kanner explained that this can’t happen either, so the alternative was to ask Black for another $550,000 in cuts, or budget on paper, a transfer to them, requiring P&R  to make a budget over 2 years to pay back. Kanner believes the P&R Department is actually in good shape and outlined a P&R comparison survey that City staff researched which shows this. He also pointed out that the current situation is unsustainable and recommended the P&R undergo a performance audit and proposes this be funded from the insurance fund money under the category of ‘other uses’.
 
Public Employees’ Retirement System (PERS) & Oregon Public Service Retirement Plan (OPSRP) - Kanner spoke to the transition from PERS to OPSRP and explained that a government ruling in 2013 (when the City was delivering its 2013-2015 biennium budget) changed the estimated rates and it was predicted that the City’s rates would increase. The City continued budgeting the same rates and the PERS rates did not actually go up. This resulted in the City’s PERS rates remaining flat. He noted that rates will most likely go up in the BN2017-2019 but not as much as feared and should be manageable. Legislature will continue to adjust PERS but will probably collar the rates and prevent rate increases. In BN2015-2013 40% of employees were OPSRP and in the BN2015-2017 there are 50% and noted that the trend will continues to increase and OPSRP rates are lower therefore fees will stay low.
 
Add Packages
Kanner noted that he has 5 recommended Add Packages for funding (listed here) and 14 not recommended for funding;
  • $28,000 per year to expand the Fire Adapted Community Coordinator Position to full time which would start in the second year of the biennium. This is currently a grant funded position and this money would continue to be available also, allowing the position to go full time.
  • Replace cardiac defibrillators. Existing units are too old and no longer supported by the supplier. There are potential grant moneys available so the proposal is that this should be budgeted in year 2 incase grant funding is acquired.
  • New vehicle for Deputy Police Chief Warren Hensman valued at $30,000 with an ongoing cost of $7,500. Deputy Chief Hensman currently uses his own vehicle.
  •  A onetime cost for new tasers. Existing units are too old and no longer supported by the supplier. This purchase would not be grant funded.
  • Operating costs for P&R to move into the Grove. P&R will pay to remodel this out of their CIP fund and anticipate that they can move recreation programs there which could help raise their revenue.
  • Kanner did not speak to unapproved Add Packages but welcomed questions.
 
Questions from the Committee
Cody noted that P&R used to routinely have a positive fund balance and asked why they no longer have. Kanner explained that P&R had a trend of expenditures increasing faster than revenues as well as under spending its budget and as a result the unappropriated fund balance would roll forward to subsequent budget cycles and would mask the trend of revenues not keeping up with expenditures. He noted that a couple of years ago when the committee made the decision to get rid of the fix property tax amount, P&R was directed to spend their unappropriated fund balance on CIP, therefore $1.5 million was spent and the “mask” is gone. This exposes the trend of expenditures outpacing revenues.
 
Lucas asked what the borrowing interest rates are. Tuneberg noted that this is a gamble but the City gets good rates through bonds however it is hard to beat money that Public Works has been able to obtain with state revolving money at 1%. Bonds can also depend if it is full faith and credit or revenue bonds as to what the interest rates will be. Lucas also asked if the P&R Department moves to the Grove, what would happen to the old P&R building. Kanner said he would let P&R address this in their presentation but he thinks several staff might stay there.
 
Cody asked why the fire ladder truck wasn’t approved. Kanner explained that council had asked the Fire Chief Karns for a report containing measures to make those buildings safer in lieu of purchasing a new truck and that this is something he needs to schedule with the Chief to get to council.
 
Gates asked about ending fund balance (EFB) balance for the Electric Department asking for clarification of the correct amount. Kanner responded the City has a set of policies which recommend EFB’s in various funds and that the planning study recommended $2 million dollars for electric. Gates asked if this was based on sales.  Kanner responded EFB’s are usually created by underestimating income and over estimating expenditures.
Electric did come under on their expenditures; however they were further under on their revenues. Tuneberg recommended Gates read pages 4-60 & 4-61 which shows EFB’s and policies.
 
Moran asked about the FTE being at a low compared to previous years. Dave noted that is flat. Moran question if personnel services is the highest it’s been, and if so what accounts for that. Kanner answered that the City will incur its first health benefits increase in 3 years and normal wage inflation from COLA step increases etc. Moran went on to ask if this was controllable or could be reduced. Stromberg reminded Moran of union contracts and COLA’s etc and noted that they have frozen COLA’s in the past.
 
Lucas asked if the FTE rate for health benefits vary. Kanner answered it is a flat fee of approximately $1,300 a month and the employee pays 5% of the premium cost depending on their plan.
 
Furuichi referred to pg 13 and questioned the line carry over noting that it dropped from 15.4% to 13.7%. Kanner explained this is the beginning fund balance which is the EFB from prior years. Lee further explained this amount is what would be carried over to BN2017-2019. Furuichi asked if it means this amount would be affected by add packages with no revenue source. Tuneberg answered yes. Furuichi asked what the safe reserves were. Tuneberg noted this has been an ongoing conversation with Moody’s and they like to see 25% on everything, however, the City it slightly lower than that and varies between funds.
 
Runkel asked what appropriations would be without inter-fund transfers.  Tuneberg agreed to pull these numbers together for Runkel.  (Removing operational transfers reduces the total budget by $3 million to $234 million. Not appropriating the intended expenditure funded by the transfer reduces the budget to $232 million).
 
Runkel asked if new estimates have been made in water revenue income based on trends as an effect from conservation efforts. Tuneberg responded he believes they did. Kanner noted there is an assumption built in and they have a new baseline which is down to 4 million gallons per day from 6 million.
 
Runkel noted that meals tax isn’t shown in revenues and asked how much this was and if it’s a dedicated amount split between P&R and the Wastewater Fund (WWF) and also if there were any way to change that. Kanner answered yes it is split between the two funds and noted this is an ordinance and changing this would require changing the ordinance. Kanner outlined what the tax funds, and noted that none of it goes to the general fund. Runkel asked what the estimate of this revenue is for the proposed biennium. Gates interjected and answered $5.5 million. Runkel went on to ask when the waste water treatment plant bonds would be paid off. Tuneberg replied the tax sunsets in 2030 and the debt service on the waste water treatment plant ends around 2024-25. He also noted that in the last tax setting period the City identified other improvements that need to be done to remain compliant which has increased the length of the loan.
 
Voisin requested a better chart for municipal court. Would like to see the whole chart and pointed out that she would like the axis to begin at zero and noted that the chart looks draconian.  Kanner pointed out that this will not affect the outcome of the chart. Stromberg agreed with Voisin. Kanner agreed to resend the chart. Lemhouse pointed out that regardless of if the chart looks different when resent, the information would remain the same.
 
Seffinger asked what happened in 2011-2013 to make the expense line change.  Kanner explained this was due to staff and wage increases and some new computer software and licensing etc and that it was not related to fines.
 
Rosenthal referred to PERS and asked if there is a reserve proposed for this biennium. Kanner answered no there is not that it would be a normal operating cost.
 
BREAK 7.46PM
CONTINUED 7.53PM
 
ADD PACKAGES                                                                                                                            
Solar Panel Park
Councilor Voisin presented and add package proposing to develop an RFP for a 10 megawatt solar park to be built on the Imperatice Property. She noted that this is not another AFN or waste treatment plant that comes with a huge public debt. Voisin went on to explain that this is a proposal to attract investors who will build and pay for a $40 million dollar solar park.  They will build and maintain the park not the City. She outlined how it would work;
  • Investors reap profits from the sale of solar power to other utilities. The City doesn’t buy the power immediately.
  • City negotiates a lease to receive the solar park after 15 to 20 years in exchange for the use of our prime solar property that citizens of Ashland own.  Only 40 acres of the 864 acres will be used.
  • The City as the owner of the solar park can then decide to own a solar municipal utility or sell it. The framing infrastructure and panels have a 30 year warranty.
  • A comprehensive preparation of an RFP detailing the property’s viability for a solar park is needed as soon as possible.  Investors must have a factual incentive to make a proposal to the City.
  • After receiving proposals from the RFP an expert in solar municipal energy guides the City and the council through a lease.
 
The add packages is a request for $75k from ECTS grant funds to be reallocated for an RFP for a solar park noting that;
  • No services to citizens are affected.
  • The Chamber of Commerce will need to delay either their website development or a business survey for one year.
  • This is a onetime request.
 
 Noted that the following people support this project;
  • Marni Koopman –of the Conservation Commission past chair
  • Roxanne Beigel-Coryell –Current Chair of the Conservation Commission
  • Drew Gilliland – Staff member SOU
  • Dr. Tom Marvin.  Physics Professor Emeritus at SOU
  • Southern Oregon Climate Action Now
 
Questions from the Committee
Cody asked if there is a solar park in Southern Oregon. Voisin answered no.
 
Lucas asked if the jobs would be full time. Bruce Fiero, Owner of Willpower Electric explained that jobs would be generally during the construction phase and that they can be anywhere from 100 to 200 jobs with some permanent technical jobs remaining. Lucas went on to ask what the life expectancy of the panels are. Voisin answered 30 years, best life 15 years.
 
Morris asked if the warranty was prorated. Mr. Fiero responded that solar panels have a 90% production warranty for 25 years and that they generally provide a 15 to 25 year warranty by the installer. He noted that while the panels are still very active over a long period of time their percentage of effectiveness may diminish some.
 
Gates asked if there were other examples of organizations doing this. Voisin responded that many other cities have built PPA’s and went on to explain the process. *Voisin agreed to provide Gates with other examples.* Gates continued and asked how investors would regroup their investment. Voisin answered about 15% of their investment can be paid back to them through the 30% income tax credit as well as a state income tax credit as well as an accelerated depreciation which equals a 10% reduction in the investment, and Department of Agriculture and Department of Energy grants and incentives.
 
Marsh asked for clarification on what is expected of the Citizen’s Budget Committee (CBC).  Voisin responded that they are asking the CBC to get involved in the budget deeper and re-allocate the funds from ECTS Grant pool.
 
Rosenthal pointed out that the funding source is very specific being from the ECTS Grants pool and asked why it isn’t being requested from another fund. Voisin answered because it meets the goals of that grant and the council goals and the tax that funds this grant is from tourists not citizens therefore the citizens wouldn’t be paying for this venture.
 
Seffinger asked where the money for infrastructure etc will come from. Voisin explained that this is up to the developer and that the City would not fund this.
 
Morris asked where the power would go. Voisin answered the investors would sell the power to PPNL at the highest rate to get a return on their investment. Morris expressed concern about who would fund the infrastructure needed to channel this power. Voisin explained it is the responsibility of the investor to build the infrastructure. Morris asked if the power would be available to Ashland. Jeff Sharp responded that there is a 69 KBA line at the end of Oak Street and this would be a place to access in the future.
 
Lemhouse asked for clarification that if the City did this the City would continue to own the land. Voisin confirmed yes. Lemhouse went on to ask what would happen if investors weren’t happy and abandoned the project once it was running. Voisin explained that the City would write that into the lease, it would be retained by us.
 
SOU Grant
Councilor Lemhouse assisted by Eric Baird from the SOU Foundation presented an Add Package requesting that The City of Ashland allocate $50,000 annually to create a grant that will be awarded to qualifying students that graduate from Ashland High School and enroll to attend Southern Oregon University.
 
Qualifying students: 
  • Applicants that will graduate from Ashland High School and have attended AHS for at least 3 years preceding graduation.
  • Applicants must apply by December 1 (tentative) immediately preceding their graduation date and be accepted by SOU admissions.
 
Grant Structure:
  • 1-time payment from the City of Ashland, equally divided by the amount of available funds for all qualified applicants
  • Funds will be managed by SOU Admissions
  • All available grant funds will be allocated each year
    • Funds that are awarded to successful applicants, but are not utilized will be re-allocated to the remaining pool of successful applicants
  • Grant fund will be replenished each budget year of the biennium
Program Details:
  • Awardees will receive a 1-time grant payment to be applied to their college expenses
    • SOU and the applicant will determine the greatest need for the student with the following priorities being funded in the following order:
      • Tuition
      • Fees
      • Books/Class materials
      • Housing
 
  • Awardees will be part of a special “cohort” that will be served by SOU Admissions.  Awardees will:
    • Receive assistance from SOU Admissions during the winter, spring and summer of AHS graduation year to identify and apply for further available grants, scholarships and financial aid
 
  • Receive specialized/personalized attention from SOU Admissions to guide through their university experience by assisting with:
 
  • Class scheduling and guidance in support of their area of study
  • Internships
  • Job preparation/placement
  • Graduate school prep/applications
 
  • Successful applicants will have the following school year from the date of their acceptance to SOU to enroll and receive grant
 
Questions from the Committee
Moran asked what a full year at SOU costs. Mr. Eric Baird from the SOU Foundation came to the podium and responded the total cost could be approximately $20,000 which is about $7,000 per year with housing and meals and other fees. Moran when on to ask what would happen if the student decided to leave the school. Lemhouse explained that the grant would be expended early in the program and would go rather quickly among 35 or more students.
 
Seffinger asked what the current dropout rate is at SOU. Mr. Baird answered that their retention rate is 75% from freshman to sophomore years and that one of the main reasons for dropout is financial. Seffinger went on to ask of the 36 students that attended how many were from Ashland. Baird said his numbers show there were 68 students this academic year from Ashland High School graduating class and of that, 47 were incoming freshman. Some years are as low as 25. He went on to point out that 36 was an average number and believes that there is a high number of students that live in Ashland but couldn’t give an exact figure.
 
Voisin asked how many Ashland graduates graduate from SOU. *Mr. Baird was unable to give this number and agreed follow up with Lemhouse to provide this information to Voisin.*
 
 
 
POLICE                                                                                                                                             
 
Tighe O'Meara and Gail Rosenberg presented a slide show and information about the Police Department as present in the proposed BN2015-2017 budget document.
 
O’Meara praised the efforts of Detective Carrie Hull and the You Have Options program and pointed out that while this has been a great success, the downside was that Detective Hull is fully occupied with that program and as a result the department is down a patrol officer. He stressed that they must find a way to make You Have Options self funding.
 
Questions from the Committee
Cody asked, regarding “You Have Options” if there is a requirement for this full time position because there is that level of assault happening. O’Meara responded that is not the case, that Detective Hull spends all of her time implementing this program in other cities and is operating partially under a grant to cover overtime. Cody praised the program.
 
Voisin noted she is pleased that the City has body cameras and asked how the City is planning on paying for storage of recordings. O’Meara answered that the City of Ashland is working in conjunction with the City of Medford and Jackson County Sherrif’s office and that the company, Taser International who are providing the cameras, will facilitate at a cost of $5,000 for the 1st year and $10,000 for every year after that. He went on to explain that depending on the crime some videos will need to be retained forever, while some may be as little as 12 months.
 
Marsh asked where the You Have Options program shows up in the budget.  O’Meara responded it is under support but the salary is under operations. Rosenberg included that registration fees from the program will also help to cover cost. O’Meara noted that the program training events show the potential to earn enough income to eventually support Detective Hulls position.
 
Seffinger asked if the visitor center will create extra duties for the department. O’Meara pointed out that studies show they don’t generally have an effect on crime from neighboring areas and he doesn’t believe it should be overly burdensome.
 
Runkel referred to the non approved add packages and asked for O’Meara’s persepective on this. O’Meara noted that he had floated the idea but understands that now isn’t the right time.
 
Runkel went on to ask if there are additional overtime costs as a cause of the staff deficit. O’Meara answered yes somewhat. Runkel asked how many additional cadets the department would like and asked for clarification of what an average cadet is. O’Meara answered they would like two new cadets to bring the level to four and explained that an average cadet is a criminal justice college student looking for a career in law enforcement. He further noted that it is also a good recruiting ground for them. Runkel went on to ask what the budget is for the four part time cadets. O’Meara responded $30,000. Runkel asked if the cadet program was successful. O’Meara responded yes, the cadets have a good rapport with people and are background checked the same as regular officers. Runkel questioned if anyone has offered to help with funds for the program. O’Meara responded no this had not been explored.
 
Seffinger asked if the You Have Options trainings are in Ashland and if it is copyrighted. O’Meara noted that other locations have been more successful so they are not held in Ashland often and that the program for now is 100% owned by APD.
 
 
 
 
PARKS & RECREATION                                                                                                                
 
Michael Black and Michael Gardiner presented a slide show and information about the P&R Department as present in the proposed BN2015-2017 budget document.
 
Questions from the Committee
Marsh thanked Black and Gardiner and asked how likely it was that the proposed $550,000 transfer would not be spent. Black responded it was likely and that they would do everything in their power to become more efficient and raise revenues and try to work towards not using that money by utilizing an efficiency audit as outlined in the department presentation.
 
Voisin asked if that meant that $550,000 was available to the P&R department with no pay back commitment. Black responded yes but their commitment is to attempt to lower spending and not have to use that money and allow it to be returned to the general fund.
 
Moran asked about the Golf Course target and asked what the average cost is per round. Black responded $9 for 9 holes $18 for 18 holes. Moran referred pg 4-87 and 4-88 and noted that personnel serves are dependent on 120% of revenues in golf sales and asked for confirmation of this. Black confirmed this is so. Moran asked how this is sustainable. Black responded that the course is not run to make a profit. Moran noted that costs are increasing by 10% and asks how they can propose to hire more staff. Black explained that these are issues that will be address through the audit. Moran asked if the golf course had ever made a profit. Black responded no and continued that they don’t collect 100% on any of the operations that P&R offers.   Black believes increase in personnel can be attributed to some temps and one part time going full time. Moran asked how many full time employees there are. Black responded two in the club house and two in maintenance and of the $800,000 budgeted over 2 years this includes temps, benefits etc which Tuneberg explained can be in the area of $50,000 over income, depending on the employee. 
 
Seffinger asked what the increase was in personnel costs when the park system went pesticide free. Black responded that there was an increase but couldn’t answer specifically to how much but noted they spend a lot more time in flower beds now. Seffinger asked if there was a personnel increase. Black responded no. Seffinger wondered if there was a materials increase. Black responded yes.
 
Rosenthal commended Black on his presentation and asked if he thinks the City could have construct North Main Scenic Park or Ashland Creek Park without the Food & Beverage tax? Black responded no, as presented in their CIP, the food & beverage tax is P&R main source of revenue for projects. Rosenthal went on to ask if the council changed it ordinance would it be devastating to parks. Black responded yes they are counting on the money to pay off debt, and fund future projects. Rosenthal continued and asked with respect to the golf course, how many other parks return 80% of their cost.  Black responded none that he knows and pointed out that it is a 24 hour a day park.
 
Gates asked if the 70% recovery target is for expenses. Black responded yes and explained that it has dropped from 96% but is unsure why. Black reiterated that the audit would assist with these issues. Gates also asked if they had a benchmark for cost recovery for programs. Rachel Dials responded they try to recover 100% adult and 50% for youth.
 
Stromberg thanked the Parks Department and staff for staying late and commented that he believes while cost recovery is important, quality of life is imperative. He stated that he has no intention of changing the Food and Beverage tax so it’s important for parks to discover a funding source and believes that the $550,000 will be integral to help parks but he believes that perhaps this should be issued as a line of credit.  He went on to state that he fully supports the transfer.
 
Cody commended and supported the audit report concept.
 
RUNKEL asked if the commission had outlined goals for the audit. Black responded they had not at this time and they would need to do an RFP and then they would outline. He noted that these are still being established and that they will be reviewing all areas.
 
 
ADJOURNMENT                 
9.58pm
 
Respectfully Submitted
Kristy Blackman
Administrative Assistant

Ashland 24/7

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