Draft Minutes
May 24, 2006, 7:00pm
Civic Center Council Chambers,
CALL TO ORDER
The Citizen’s Budget Committee meeting was called to order at 7:03 pm on May 24, 2006 in Council Chambers at
ROLL CALL
Mayor Morrison was present. Councilor Amarotico, Jackson, Silbiger, Hartzell, and Chapman were present. Budget Committee members Bond, Everson, Mackris, Stebbins, Thompson, Levine, and Gregorio were present.
STAFF PRESENT: MARTHA BENNETT, CITY ADMINISTRATOR
LEE TUNEBERG, AMINISTRATIVE SERVICES DIRECTOR
KEITH WOODLEY, FIRE CHIEF
MIKE MORRISON, PUBLIC WORKS SUPERINTENDENT
JIM OLSON, ENGINEERING SERVICES MANAGER
BILL MOLNAR, INTERIM COMMUNITY DEVELOPMENT DIRECTOR
ADAM HANKS, CODE COMPLIANCE SPECIALIST
CINDY HANKS, PROJECT MANAGER
BRYN MORRISON, ACCOUNT REPRESENTATIVE
APPROVAL OF MINUTES
Approval of Budget Committee minutes dated:
5/04/06
5/10/06
5/18/06
Everson/Bond ms to accept the minutes as presented. All Ayes.
The Committee offered condolences to the family of Jack Hardesty who passed away on May 22.
PUBLIC INPUT
None
Lee Tuneberg, Administrative Services/Finance Director pointed to the packet that was distributed. See attached. He spoke to the changes that had happened throughout the year, and provided a summary of what had happened throughout the budget meetings. He spoke to items that the Committee had tentatively approved to that point. Items include: city wide reduction in health care, redundant amount in dispatch moved to CERT program, $250,000 cut for software, the $4,000 included for the Electric Recycle Commission, and IT department reduction of CATV services with the addition of moving the debt service to the debt service fund from the telecommunications fund. He spoke to eight items that were new. They are a regional problem solving group for land use funding $3,300, rental needs analysis of $25,000, central service fund reduction of $262,506, RVTD bus service change, Municipal building assessment, additional programs and positions that require a property tax rate increase, the aerial fire apparatus truck, and to identify a revenue source for the AFN debt service payment.
Mr. Tuneberg added that the fire apparatus has a 10-12 month delay between when the equipment is ordered and when it is received. He suggested that it should be budgeted in 2008 as a result, if it passes the vote in November. Mr. Tuneberg notified the Committee that the Council meeting to discuss the AFN debt service would be June 6, but the Committee could discuss it as part of setting the property tax rate.
The Committee asked to clarify item 6 and which utility worker was added already to the budget. Mr. Tuneberg responded that a line worker in Electric and water worker in Public Works are included in budget; two other utility workers for Public Works are in the outstanding items. He confirmed that the forest interface position and the CERT positions are included in the budget. The Committee asked if when the Budget Committee approves the budget, if they approve the salary schedule. Mr. Tuneberg responded that this Committee doesn’t set the wages specifically, this Committee approves the appropriation levels and then Council adopts a resolution that sets the appropriation.
The Committee asked where the nearest aerial fire apparatus was. Keith Woodley, Fire Chief responded it is at
Mr. Tuneberg spoke to the Fiscal Year 2006-2007 Summary of Changes spreadsheet. He explained to the Committee that the outstanding items show what they could change if they chose to approve them. He pointed to the third page which shows the appropriation level and total budget. He explained that they do not set the ending fund balance in the appropriation so this shows only what is appropriated which is $78,065,338. The Committee asked what tax rate that figure represented. Mr. Tuneberg responded that is the same rate as last year with no increase, $3.7147.
Mr. Tuneberg clarified that the outstanding items column only includes the outstanding items from the cover memo, excluding the parking lot items. He explained that the item letter and/or number represented in the memo is shown in the right column of the spreadsheet. He spoke to the central service reductions for the departments affected and that the exact figure for each department can be negotiated.
The Committee asked to clarify the bus service and what service RVTD would provide for the $290,000. Mr. Tuneberg responded that Council had not made the decision yet on what direction to go in that issue and that Council will need to decide what level of service they want to continue. Mayor Morrison added that the City has spoken to RVTD and there are options for service, and feels the City should leave the $290,000 in the budget as it is now until Council looks at the options.
Mr. Tuneberg spoke to item 5. He is proposing to cut the archive building, the city council remodel, electric building enclosure moved to electric fund rather than administration and to be funded through rates, and a space needs analysis be implemented to determine the needs of the City. The Committee asked what the consequences would be of moving the electric building to the electric fund. Mr. Tuneberg responded that it would need to be paid through rates rather than facilities fees or a property tax rate increase. The Committee questioned what other than rates could pay for it. Mr. Tuneberg explained that the Electric department had talked about some things they may need to cut and they may not change rates depending on the fund balance in August. The Committee questioned what percent of the building is used by the Electric department. Mike Morrison responded that it is 100% Electric.
Councilor Chapman asked where the $75,000 was that was already allocated for the Council Chamber remodel. Mr. Tuneberg responded that some had been spent on consultants. The Committee questioned why the City didn’t go back to the original lighting and sound upgrade only. Mr. Tuneberg responded that the original $75,000 was budgeted for lighting and sound but the scope had changed and the project would need to be rebudgeted for the next year. The Committee asked to clarify if all of the funds were spent and what would be rebudgeted. Mr. Tuneberg explained that the project will not be completed this year so the remaining funds will need to be rebudgeted in the next year. Mr. Chapman asked who decided to increase the amount needed for the project and how it was to be spent. Mr. Tuneberg responded that he did and told the consultants to reevaluate the project. He explained that the City may need to have an analysis done and may either decide to go to bond or fund internally or not do at all. The Committee asked if the $50,000 that was proposed to be budgeted for the entire City needs assessment for the buildings was reasonable. Mr. Tuneberg responded that he looked at previous studies and what they cost.
Mr. Tuneberg spoke to item 6 and that they could not fit originally in the budget to balance so they were put on the parking lot list. The City needs to establish a revenue source if they want to fund those items. Mr. Tuneberg proposed that the Committee include the outstanding items in the approved budget, excluding the parking lot list. The Committee asked if the decision on property tax needed to be made that night. Mr. Tuneberg responded that they could hold another hearing to propose a property tax rate but that would push the calendar out and make it difficult to comply with the state requirements for completing the budget. He added that they need to talk about if they want to use the levy to pay for debt service. He clarified the revenue stream is not identified yet; only the expense is shown so far. He explained that there is $.57 left of the limit that could be levied, and that would generate $1 million. The debt service for AFN is $865,000. He added that the Committee would need to levy $.51 to generate enough to pay the debt service.
He clarified that if the Committee did not raise the property tax, the City would have to raise fees to make the payment. The Committee questioned if the payment would come from the ending fund balance if they did not raise property taxes. Mr. Tuneberg responded that Council could use ending fund balance or set rates and fees to make the debt service. The Committee questioned if the $300,000 for the Council Chambers and the $100,000 for the archive building could be cut to add to the ending fund balance and use that for the debt service. Mr. Tuneberg responded that would be an alternative to do subsidies by transferring money from other funds. The Committee asked if the Debt Service on the Summary of Changes spreadsheet $1,656,169 represented AFN and General Obligation (GO) debt. Mr. Tuneberg responded that it includes all GO debt and includes that previously shown debt that was in the Telecommunications Fund and shown as option 1.
Mr. Tuneberg spoke to the process staff had gone through to determine alternatives for the debt service payment. He stated that he asked Council to provide their opinion on how the debt should be paid, and did not receive input from some. He stated that from those that submitted recommendations, there was an interest in that half of the debt is paid through property taxes, which would be a $.25 increase and also an interest in, most if not all, paid through a percentage charge through the utility bill. It was clarified that they were only talking about a solution for the debt service for the next year, not an ongoing solution. Councilor
The Committee questioned if the debt could be paid through the existing property taxes that are collected. Mr. Tuneberg spoke to the policies that have been established for ending fund balance. He explained that he would not suggest using fund balances to make payments or use as a one time fix, that the City would not have the revenue to restore it. He added that they could divert projects in the Capital Improvements Fund to pay for debt service for a year, it would be a subsidy. The Council would need to determine what revenue stream would be used to pay the debt service for the long term. Mayor Morrison explained that when Council had the discussion about how to pay the debt service, they did not talk about using the ending fund balance. He added that it is the responsibility of the Committee and Council to approve the healthiest option. He questioned if using the carryover was healthy for the City. Lynn Thompson stated that her suggestion was not that it was a one year approach, that it would need to be a policy decision, and asked if the City would be able to accommodate the AFN debt in the current operating budget, adjusting City services to accommodate it. Mr. Tuneberg responded that may require reductions in operating budgets for departments or not do projects that are proposed, and do a transfer, that could pay for the debt service. He stated that eventually a rate or fee increase would be necessary to pay the out years. The Committee questioned if they did raise the property tax for one year to cover the debt service, then the next year they would reduce it by the $.51. Mr. Tuneberg responded that would be his expectation and it also would be the Committee’s and Council’s decision and they would need to decide how to pay the debt the following year. Councilor Amarotico stated that he appreciated Ms. Thompson’s idea, but thought that if the City could use the existing budgets, they would. The citizens are using the services the tax supports and would not like to see those cut. He supports the option of a surcharge or increasing the property tax and eventually turning it into a GO bond.
The Committee clarified that Mr. Tuneberg was not suggesting that they add any of the additional parking lot positions to the budget. Mr. Tuneberg confirmed. Dee Anne Everson supported using the excess fund balance to cover the debt service and supports adding the community visioning. It would help to know what level of service the people in the community expect or want.
The Committee discussed postponing the decision of the debt service until after the June 6 Council meeting. Mr. Tuneberg explained that they could adjust the schedule if the Committee did not want to approve the budget that night and wanted to wait until after the June 6 Council meeting. He added that would require an additional Council meeting to adopt the budget at the end of June putting pressure on staff to complete the budget by July 1. Councilor Hartzell expressed her concern over moving the electric storage building to another area of the budget, and not addressing the affect of reducing the ending fund balance of electric.
The Committee asked what the state of
Mr. Chapman left at 9:06 pm.
Mr. Silbiger stated he would rather vote on some items and not others, Ms. Hartzell agreed. She would like to have the dispatch for Fire budgeted under Fire and the Police portion budgeted under Police. Mr. Tuneberg suggested they support the motion and then the Council could change it at the time of adoption up to 10%, or once the funds are appropriated, they could do a supplemental or transfer.
MOTION TO APPROVE THE FY 2006-07 BUDGET
The Motion was voted on. Amarotico, Bond, Everson, Gregorio, Jackson, Mackris, Morrison voted yes. Hartzell, Levine, Silbiger, Stebbins, Thompson voted no. Motion passed 7 to 5.
Everson/Amarotico ms to approve Property Tax Permanent Levy of $3.97470/$1,000. 9 yes, Thompson, Stebbins, Levine opposed.
Jackson/Bond ms to approve Bond Levies of $367,262. All Ayes
Jackson/Thompson ms to approve Local Option Tax Levy of $1.38000/$1,000. All Ayes
Silbiger/Mackris ms to accept recommendations of the economic and cultural development grant subcommittee as presented. 11 yes, Hartzell opposed.
COMMITTEE COMMENTS
Ms. Everson stated that she would like to see Council address the requirements of the grants and define more specifically requirements for grant applicants, applications, and those that review the applications. She would also like Council to look at the Mayor and Council’s access to health insurance and compare what they receive to other cities. The Committee thanked the Committee and staff for the work they did on the budget. Mr. Tuneberg thanked the Committee on the work they did through the process. He asked the Committee to give feedback and to complete the survey’s that will be sent out.
ADJOURNMENT
The meeting was adjourned at 9:31 pm.
Respectively Submitted,
Bryn Morrison
Account Representative