Melanie Purcell, Finance Director called the meeting to order at 3:07 p.m. via online meeting on Zoom
 
ROLL CALL (Recording Timestamp 1:11)
 
Present:      

Councilor Paula Hyatt	Ellen Alphonso
Councilor Stephen Jensen	Jim Bachman
Councilor Shaun Moran	Shane Hunter
Councilor Gina DuQuenne	Bob Kaplan
Councilor Tonya Graham	Mike Morris
Councilor Stefani Seffinger	David Runkel
Mayor Julie Akins	Saladin Amery

 
Absent:  None
 
REVIEW ROLES AND PROCESS (Recording Timestamp 2:15)
Purcell and City Attorney Dave Lohman presented to the Committee a presentation on the roles of the Committee and the process of this budget cycle. Presentation Attached.
 
ORGANIZATION (Recording Timestamp 15:48)
Purcell called for the Committee to Elect a Chair and Vice Chair. Moran/Bachman motioned/seconded the election of Shane Hunter as Committee Chair. Discussion: None. Voice vote. Motion unanimously approved. Morris/Hyatt motioned/seconded the election of Jim Bachman as Vice Chair. Discussion: None. Voice vote. Motion unanimously approved.
 
Committee Chair Shane Hunter explained the upcoming tourism grant process and asked for volunteers. (Recording Timestamp 18:30) Purcell confirmed to the committee that applications and information will go out to organizations this Friday, April 2^nd and applications will be due back April 28^th. The committee will then be deliberating these recommendations on May 11^th. The recommendations made by this subcommittee will be part of the recommendations of the total budget that will go to Council at the end of the budget process. Mayor Julie Akins, Councilors Paula Hyatt and Gina DeQuenne, as well as Committee Member Jim Bachman volunteered to serve on this committee. Hyatt also spoke to how rewarding it was to serve on this committee.
 
BUDGET (Recording Timestamp 22:06)
City Manager Pro Tem, Adam Hanks presented to the Committee a presentation on the recommended budget. This included influencing factors, challenges, opportunities, and accomplishments in the last biennium. He also spoke to related topics as outline in a three phased approach and key issues related to the budget. Purcell presented to the committee as well regarding the budget methodology. Both Hanks and Purcell spoke to the balancing approach. Purcell went on to explain federal American Rescue Plan Act Funds and Hanks added information on changes in operations and service. Also discussed in the presentation was rate relief and funding stabilization, the general fund forecast, policy decisions, sources & uses, property tax, transient occupancy tax, franchise fees, user taxes, Ashland Forest Resiliency charges, Public Safety support fees, food and beverage tax, uses of fund balance and reserves, personnel, materials and supplies and capital. Purcell also defined to the committee uses by fund and future policy decisions.  Presentation Attached.
 
City Councilor Shaun Moran asked during this presentation regarding the timeline of paying off  the debt for the Ashland Fiber Network loan (Recording Timestamp 38:30) Hanks responded that there was about four more payments left with the debt previously being allocated to various places within the budget with the majority of it being in the electric fund.  Moran further asked if for a year in which this would be paid off and if this could be paid off early. Hanks stated that it would be four years from now in 2025 and that he was not aware of anything that would prevent an early repayment.
 
 
PUBLIC FOURM (Recording Timestamp 2:03:00)
Written Testimony Submitted (See attached)
 
Oral Testimony Given
Hunter gave to those giving oral testimony a 2-minute time limit.
 
George Kramer spoke to frugality and being economic with money. He suggested that the Committee freeze or cut spending as people all around Ashland are making daily decisions on how to stretch their money in the current economy. He added that unlike the City most people cannot raise revenue with a single vote and force others to pay the bill. He also added that it was rude for the City to try and raise taxes at this time. He also spoke to the structural imbalances or spending more than you take in and how the city raises more money to solve this problem or uses its reserves. He suggested freezing of spending, as most everyone in town already has. He also added that the City should stop using increased taxes and creative fees to solve these issues and that these funds come from rate payers. These he went on to say are aggressive forms of taxing and he acknowledges that no one wants to reduce staff or delay projects, but that Ashland needs to learn to live within its means and make hard choices between its wants and needs. Kramer also added that a look at salaries and benefits also needs to take place.
 
 
 
 
COMMITTEE QUESTIONS (Recording Timestamp 2:07:39)
 
Purcell began by stating that she had received a question regarding the sale of surplus property for use in the housing fund that is intended to replace the marijuana tax. She went on to say that the expectation is that these funds will exceed what is currently contributed by marijuana tax. This transfer she added is intended to be temporary and that the City would have to get further through the biennium to see where they would go after this.
 
Hunter confirmed with staff that the emails of public testimony and the oral testimony given was all that was needed to be presented to the committee. Staff confirmed that this was correct.
 
Akins asked regarding the housing fund that Purcell had previously spoke about. She further asked if the marijuana tax was suspended, as this is typically used to add money to the housing fund, if the money would be used elsewhere. Purcell responded that money would come into the general fund and remain in the general fund instead of being transferred elsewhere. The idea she summarized was to replace the contribution with funds from the sale of property. Akins went on to ask how this would be more stable as the marijuana taxes are already stable and there are still many details to work out in regard to the sale of the property. Hanks added that policy questions regarding this was set to go to Council. He added that the property estimate exceeds the previous amount estimated through taxes and that there is an option to discount the price to an entity to provide affordable housing. Akins added that she like the idea of a public/private partnership, but that there may be an idea to split funds to go both in the general fund and the housing fund. She suggested that they keep this as a future talking point, to which Hanks added that it was already a policy discussion for Council.  Akins asked the committee to send any input her way regarding this. 
 
David Runkel, Committee Member thanked staff adding that it was a clearly stated budget message that included important topics of discussion.  He also spoke to concerns that he had about not being aggressive enough in dealing with the imbalances including the postponement of putting money into reserves. He added in response that there needs to be a more aggressive approach.
 
Jim Bachman, Vice Committee Chair suggested that in the future the committee was allowed to take breaks near the middle of the presentation. Akins agreed with this suggestion that there be stop points in future presentations.  Hunter also agreed and staff acknowledge that this was something that could be done in the future. 
 
Bob Kaplan, Committee Member talked about the term structural imbalance. He suggested that the term can be managed many ways. He added that for the purposes of the Budget Committee roles verses that of Council it would be important to note where structural imbalances come from and what it is the Budget Committee can do. He explained that most of what was presented was that of a policy decision that Council needed to address. He asked for direction on what the Committees role was in this.
 
DuQuenne spoke to her support of stop points within the presentation. She also commented on phase one that was previously presented.  In phase one she noted the reduction in utility fees and her concerns surrounding the Capital Improvements Plan as well as the use of federal funds. She suggested not using federal funds for the use of a Wastewater treatment plant but suggested connecting to Rogue Valley Sanitation Service, to save the City money. She also supported Mr. Kramer and his discussion on being frugal. She then discussed the importance of priorities.  Hanks responded that these are not the utility fees that are being reduced but that they are the franchise fees that will be reduced. He further added that since items like wholesale power are bought, rates have to be in line with the costs involved. He ended by noting that CIP is a prioritized list based on what year within master plans that each item is in.
 
Bachman asked about Kaplan’s point for the term structural imbalance and how this relates to the Committee. Hanks spoke to how this related to the structural imbalance and the charge before the Committee. Hanks stated that staff could put something together to better frame this and that the definition that he uses is that the existing revenue streams that exist in the revenue fund are insufficient to cover the existing and forecasted expenses. Staff he stated would help highlight the why to this. Bachman asked if the recommendations can be changed. Bachman clarified from a standpoint of this Committee that there would be some recommendations that could be made to add or takeaway from the budget. Purcell reiterated this point by saying that any recommendations of the Committee will go as they are stated to Council, any changes are the choice of the Committee. The only requirement she added would be that revenues and expenses move together.  Bachman added that it will make the meetings more productive to have it defined as to the Committees role on policy decisions. Hanks responded to this adding that this has been an ongoing question and as the budget focuses on people there can be limitations on what recommendations can be made. 
 
Hyatt spoke to the change in the funds and how Parks would be funded. Her first question asked when in 2030 as the Food and Beverage Tax is set to sunset or extend, what would happen to Parks?  She also spoke to the ballot measure and the language that surrounds this. Based on her observation from the presentation this language seems capital in nature and not operational. She added that she wanted a focus on operating expenditures.  Hanks stated that they could bring back more details on this including more on the funding plan. He also spoke to the original voter approved language of Food and Beverage, that included parks open space acquisition. 
 
Akins asked if this could be taken to voters again to which Hanks agreed. DuQuenne agreed that this should go to the people.
 
Saladin Amery, Committee Member stated that he really like the presentation and the fact that cuts are being made. He added that Purcell had stated that staffing was the largest cost and that although staff numbers have gone down the overall costs have not. He stated that he would like to know where the savings will come from in these cuts. He referenced a 1.7% in this space and asked what this would equate to in numbers. He also spoke to the presentation of lowering utility fees and taxes and the hope to make this up through new revenue streams. These revenue streams he suggested are unknown and we do not know what the future holds. He asked that these revenue streams be explained to the Committee.
 
Hunter asked about the two-hour rule for staff research into questions. Purcell stated that they would know most likely as questions are asked if they will take more than two hours. She stated that at this point these seemed that they could be answered in less than two hours.
 
Hanks spoke to Amery’s questions regarding additional revenue streams and that if additional revenue streams are not looked at then there would have to be a look at altering those in the form of reducing staffing primarily to Police and Fire. He added to that this will be a serious conversation in the community level minimum and the commitment to public safety. This is different he explained than those of the enterprise funds and utility rates that are more predicated on the capital side.
 
Amery spoke to the 2017 budget process and how there had been thought given at that time to the ambulance service making sense. It was thought he said that there may be a cost savings in this. Hanks stated that the study that is taking place is a post budget question and will need to be looked at to see if there is a tradeoff of benefits for savings.  He also spoke to Fire regionalization in the six to ten year range and that many other agencies are involved in these decisions so the City is sometimes not always in charge of the other options. The study regarding the ambulance service is far along at this point and should be presented to council in June, said Hanks.
 
Councilor Stefani Seffinger spoke to the level of the risk factor and the time that it would take for this and other projects like those presented in the housing fund, climate energy and forest management. She added that many of the items are interrelated together and the question should be asked if these are more important than the utility fees.  
 
Councilor Stephen Jensen spoke to the previous mentioned purview of the Committee. He suggested a skit to present to the Committee what this purview would look like. His fear in going into policy discussions is that the process will be a long and tedious process with frustration. His hope is to give sound advice to Council.
 
Akins spoke to the ORS 294.414 statue asking Committee members to do research on this as it gives direction to the Committee. Hanks added that there is some overlap of this in what the adhoc budget process had already worked on as well.
 
Kaplan spoke to the structural items and that these are part of the roles of Council. He added that this cannot happen by this Committee within the next few weeks. He went on to say that the Committee needs to focus on items that are not related to these policies in order to accomplish the Committees tasks.  Hunter agreed with this stating that they as the Committee are only to approve funds, but the details of how, the Council decides.  
 
Moran thanked Hanks and Purcell for their work. He added that as Purcell previously stated the Committee needs to focus on outcomes and be results orientated. His hope as a Council member is to use the advice of this Committee to move forward in achieving results that everyone wants. He also added that knowing that over the years there has been issues with the budget that revenues do not match expenditures. This he added has been a structural imbalance that has existed over time and he is glad that it is being acknowledged as something that needs to be addressed. Moran also stated that moving money around for short term bridge financing is not a solution.  He then asked in regard to the franchise fees covering street funds and what would happen if these fees do not cover the cost and referenced debt. Purcell stated that she had worked with the Public Works Director and that to get the most out of funds it is best to structure debt in a way where you do more projects, but the projects have to be large enough to get financing. Using franchise fees, she noted is considered more stable when it comes to financing. With the staggering of this recommended the proper debt coverage can be achieved. Moran asked if these projects have been identified to which Purcell noted that they had not entirely been, but they look at it as more of a ballpark.  She added that specifics of these projects must come back to Council for approval.
 
Moran then asked about the funding for parks. He questioned how the rate was calculated. He cited the historical funding rates between 75% and 80% and if it was written in stone that this has to be 98% or if a discussion could be had. He also asked if thought could be given to a rate closer to 75% and money used elsewhere. Purcell recommended that this be a topic for next week’s conversation and that she would send out the breakdown and logic behind this rate. There was thought she added about carving up revenue streams into small piece which she stated pits people against each other for their part of the pie and that it is better to shift the philosophy to a direct nexus of funds. She also stated that Parks is more flexible with this type of funding.
 
Hunter added that other questions can be sent directly to Melanie. Hunter also added that there is room for more meetings after May 11^th but proper notice would need to be given. Purcell suggested that the Committee needed to be mindful of the Council’s need to publish.
 
ADJOURNMENT
 
Hunter called the meeting adjourned at 6:02 p.m.
 
Respectfully submitted,                                                                                      
Natalie Thomason
Administrative Assistant