Budget Committee Meeting
CALL TO ORDER
November 19, 2015 6:00pm
Civic Center Council Chambers, 1175 East Main Street
The meeting was called to order at 6pm.
Marsh arrived 6:18
Seffinger arrived 6:13
APPROVAL OF MINUTES
Runkel noted a change to the motion proposed changes to Parks & Recreation budget (from 5/14/15 Parks Commission memo) should be 13 yes & 1 no.
To approve the minutes of the May 21, 2015 Budget Committee Meeting as amended.
DISCUSSION ISSUES FOR THE BUDGET COMMITTEE
Review of first quarterly financial report
Tuneberg outlined the financial report for the budget committee noting that the first quarter can be a vague look at the biennium and how it may go. Pointed out that the city spent 2.6 million dollars more in the first quarter than was received through revenues, but reminded the committee that the biggest revenue stream for the city is property tax which is not received until November.
Gates noted that he found it difficult to find relevant information and asked if were possible to reference areas in the report to the budget. Tuneberg responded that he would look into how to make this more effective for the reader.
Gates asked for clarification regarding other financing resources in the amount of 26 million dollars on page 2. Tuneberg explained they are borrowings, financings, other resources that are not revenues like charges for service. Tuneberg offered to get a breakdown of these for Gates. Gates further asked if these are debt obligations. Tuneberg responded no, as budgetary resources they will become debt service but they are currently new borrowings.
Tuneberg moved onto the resolution adopting appropriations.
Voisin referred to page 4 of those pages and asked about Public Works Improvement SDC improvements totaling 3.170 million and Public work debt SDC totaling 361,000 dollars. Tuneberg responded according to the budget and the CIP and what public works said they were going to do in this biennium; 3.17 million was to come from water SDC’s. That is a budgeted to spend ‘down’ their SDC balances.
Stromberg asked what kind of debt instruments we are using. Tuneberg responded that borrowing is varied, i.e. state loans, low interest rates, rev bonds, full faith and credit bonds. Infrastructure is usually done in 20 – 30 year borrowing terms.
Stromberg asked where we are in terms of borrowing capacity in relation to full faith and credit. Tuneberg responded that we are fine but eventually we need to ask if we are done with full faith and credit borrowing.
Tuneberg went on to page 7 Government Fund Financial Statements and outlined the general fund revenues and other sources. He pointed out the appropriations and noted that each of these are broken down by departments and are on a program basis. Pointed out that as per Oregon Budget Law, you can only transfer out of a contingency to a specific category through council resolution. There were no concerns with any expenditure in contingency.
Preliminary numbers show Food and Beverage Tax up approx 7% and Transient Occupancy Tax up approx 11%. These are raw unadjusted numbers.
Rosenthal referred to pg 23 Parks & Recreation Fund and asked about charges for services internal and asked if we should be concerned about the estimated amount budgeted is $700,000 more than last biennium. Tuneberg responded no, there shouldn’t be a problem and that the transfers to date reflect one 1/12th of the first year of the budgeted biennium amount.
Voisin referred to page 12, Capital Improvements Fund and asked about the expense of 7 million dollars and what taxes would go into the revenue to fund this. Food &Beverage tax is split between wastewater and parks improvement open space and all of this will come with taxes.
Voisin asked if that Food &Beverage revenue is anticipated to increase by 2% this biennium, would we spend that. Tuneberg said it was something we would look at. Kanner cautioned against spending a bump in revenue after the first quarter as the following quarter could prove to be lower and noted that these fluctuations have a tendency to even themselves out.
Gates asked in relation to the police department if the officer position had been filled. Kanner responded that the officer had been reinstated.
Gates commented out that in the future he would like to be provided with information regarding capital project supplement budget changes.
Moran referred to pg 2, personal services which are budgeted at 61.6 million but seem to be running at 58 million and asked what is the reason for this? Kanner and Tuneberg explained that this difference accounts for position vacancies, negotiations etc.
Voisin referred to the water fund pg 14 and asked about the 1 million dollar council approved allocation for TAP. Tuneberg clarified that the part of the project that was approved by council will show as coming out of public works water supply.
Discussion of ECTS grant process
Runkel introduced the ECTS grant topic and noted that there was a memo handed out. He proceeded to ask if anyone had any suggestions to how this should move forward.
Rosenthal said he would like to see things continue along the same lines for another round next year; however he suggested adjustments to the methodology. Believes the process is time consuming.
Marsh agreed there is room to improve and believes the applicants are being underserved by the process being deliberated over by the budget subcommittee and believes they could be better served by a more diverse group from the community.
Voisin supports a change and believes that council should debate with citizens as well as agreeing that the process needs improvement. She believes the big awardees should be included in the automatic awards like Shakespeare. Moran expressed agreement with Rosenthal’s comments.
Morris also expressed agreement but doesn’t think we are ready to disband the group. He agrees with Marsh that the process is cumbersome but time needs to be devoted to the organizations.
Cody agreed that it is a lot of work. She would like to look at streamlining guidelines the same Housing and Human Services has.
Lucas would also like to streamline but would like to see it stay with the Budget Committee.
Stromberg would like to see a reduction to the burden of the application process for the applicants. He believes this would allow them to make more effective presentation and would like to see them give a personal presentation.
Darrow thinks it makes sense to make changes but asked what the Budget Committee’s role in doing that?
Runkel pointed out that there was never a resolution assigning this duty to the Budget Committee. Kanner agreed that it is customary for the Budget Committee to participate however, there is no written law stating this.
Rich would like to see as many members participate in the next round and then a week later meet to discuss improvements.
It was tentatively agreed that Marsh, Rich, Cody, Gates and Runkel would meet informally to look at the application forms before February 2016.
Morris asked Runkel for clarification in relation to dropping the Economic Development aspect of the program. Runkel explained that he doesn’t believe that any of the grantees fall into this category.
Voisin asked if there was a better way to receive more information regarding how those recipients receive their funding. Blackman explained that currently recipients reports are due October after the closing of the next grant funding year therefore we would not be able to see how the money was used until the following year.
Stromberg believes applicants are a great reflection of Ashland.
Voisin thought it would be important that we look at the possibility of giving larger recipients a percentage rather than allocating.
It was agreed that an informal meeting would take place to discuss the application process.
Voisin left the meeting at 7:01pm
Marsh reiterated that the meeting would be to work on the application form for the grant only.
Kanner noted that the form was revised 3 years ago and that revisions to the form would need to go to council.
Proposed agenda topics for off-year Budget Committee meetings;
- Role of the budget committee
- Kanner raised the question of what the Budget Committee be should be; a financial advisory committee or a committee who just reviews the budget as per state law.
- Stromberg supports this being an off year topic.
- Rosenthal agreed that there needs to be clarification for new members in particular.
- Gates agreed that it would be beneficial to clarify exactly what it is that the committee approves.
- Possible use of study groups
- Runkel there has been expression of interest by certain members. Maybe 3 or 4 members to look at the cities expenditures.
- Lucas asked how this would work. Runkel stated that there should be some formality but 2 or 3 members will be recognized as looking into subjects.
- Stromberg would like it looked at deeper and raised the question of who might be interested. Gates, Lucas Moran, Cody raised their hands.
- Capital improvement plans – project identification, funding and prioritization
- Kanner noted the possibility of CIP updates.
- Department presentations and prioritization of presentations
- Kanner asked; do we want to change the sequence, adjust time of presentations?
- Gates would like to see a different orientation and much more of Public Works.
- Moran agreed and would like to see prioritization.
- Seffinger believes that department prioritization in relation to city goals city concerns and city needs are every changing and need to be addressed.
- Review of financial policies
- Tuneberg pointed out that these do need to be updated and theoretically these are updated by council but the budget committee can have input.
- Stromberg expressed interest in this topic.
- Review of City revenue streams (information only)
- Update on Parks performance audit
Moran raised concerns with the budget document and suggested that each division of each department provide their FTE’s as well as requesting that a graph of compensation amounts be made available for each division of each department. Kanner noted that there may be an opportunity to view figures from the OSU study.
Stromberg suggested giving a presentation on city compensation.
It was agreed that Topics for the off year would be;
Role of the budget committee;
Possible use of study groups;
Capital improvement plans – project identification, funding and prioritization;
4.Electric Department 10-year plan;
Department presentations and prioritization of presentations;
Review of financial policies;
Review of City revenue streams (information only);
Update on Parks performance audit;
Presentation on compensation;
It was agreed that off year budget meetings would be spread out over the year and that Blackman would schedule.
Darrow asked if there were certain categories of information for the upcoming budget that the committee should be studying.
Stromberg suggested climate action, transients, demand for resources for those, as well as supplemental budgets. He added that there may be discussion of insurance as well as the Fire departments long term future and possible merger with Fire District 5.
Darrow questioned if these items be added to the spring meetings. Stromberg suggested a reminder be sent to budget members to attend study sessions.
Kanner went over insurance and explained the EOY loss ratio was 74% however moving into October there was an exceptionally large claim. He went on to remind the committee that it is too early to determine how things will go.
Gates asked Stromberg about AFR. Stromberg said that grants are going well and are in programs that provide follow up grants and this would allow finishing a thinning project that is underway. City needs to figure out how to reduce smoke from burn offs and this is an area that the city may be focusing on.
Gates asked about the solar field proposal that was set aside for consideration. Stromberg responded that it was agreed by most that the city having control of a solar park whose output was managed and revenues collectable by the city would be beneficial to the city, however, the proposal that was made was to put energy into a grid to be managed by an outside entity who after at the end of the contract would turn over a 20 year old solar park to the city. Stromberg also pointed out that with an ongoing cost curve it would make more sense to purchase at a later date and the city would revisit this then.
Seffinger raised concerns regarding safety and downtown behavior and asked where the money would come from for safety. Runkel asked if the restricted portion could be used. Kanner responded no but the unrestricted portion can be. Seffinger would like to explore options how unrestricted money could be used. Kanner pointed out that most of the general fund money is appropriated and we would need to reallocate. Seffinger suggested using the social service grant money.
Supplemental budget process
Lee outlined the supplemental budget process and the details of the upcoming Supplemental Budget item ‘Resolution Adopting a Supplemental Budget Establishing Appropriations within the Biennium 2015-17 Budget’ which is due to go to council on December 1, 2015 and addresses the need to purchase a new software program for the finance department.
Lucas asked why this wasn’t subject to the Oregon Public Contracting Law Contract Law. Tuneberg responded that because we are migrating software from the same provider it is not subject to that rule.
Runkel reiterated citizen concern that the item was listed in the budget but wasn’t approved. Tuneberg clarified that this item was in fact not a part of the budget, it was identified as a future need and could wait until the next biennium. However, subsequent to this meeting it was identified that current software support would not suffice and that a considerable cost savings had been identified which was time sensitive, making it essential to go forward with a supplemental budget.
Moran asked if this had been part of the Administrations Services Financial Software and part of the ad package. Tuneberg answered that this was not part of the ad package. Moran asked what the ad package was that was in the budget. Tuneberg noted that it was listed as a need but it was decided not to pursue it at that time and clarified that the upcoming purchase is now different than the original consideration. Moran asked again if this was turned down during the budget approval process to which Tuneberg responded it was never a consideration during that time.
Meeting was adjourned at 8.00pm