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Budget Committee Meeting
Agenda
April 24, 2003, 7:00pm
Civic Center Council Chambers, 1175 East Main Street
CALL TO ORDER
Chairperson Marty Levine called the meeting to order at 7:03pm.
ROLL CALL
Present: Budget Committee Members Don Laws, Russ Silbiger, Jacquie Christensen, Marty Levine, Jim Moore, John Morrison, Dave Williams, Alex Amarotico, Cate Hartzell, Alan DeBoer, Ray Olsen, Chris Hearn, Roberta Stepahin and Kate Jackson.
Staff: Gino Grimaldi, Lee Tuneberg, Paula Brown, Ken Mickelson, Mike Morrison and Kirsten Bakke.
APPROVAL OF MINUTES
Approval of minutes from previous budget subcommittee meetings dated:
12/12/02 Budget Committee - Introduction
03/05/03 Economic & Cultural Development Grant Presentations
03/12/03 Social Services Grant Presentations
03/13/03 Social Services Grant Recommendations
Amarotico noted that Hearn was listed twice on the 3/12/02 minutes and that the 12/12/02 minutes should have read Diane and not Christine Amarotico. Silbiger noted corrections in the calculations on the 3/13/03 minutes.
The Committee agreed to wait for the corrections and approve the minutes at the next meeting.
PUBLIC INPUT
BUDGET MESSAGE AND OVERVIEW
City Administrator Gino Grimaldi began by thanking the staff and the Committee. He gave an overview of the City’s accomplishments and the completion of major projects. He said that the City was at a turning point and talked about the challenges the City is facing. He pointed out that the City is spending $475,000 more than it’s taking in, saying that luckily because of prudent decisions made in the past, we have reserves that allow us to absorb that deficit. He noted reductions in Materials and Services. He alluded to some new positions in the budget to maintain the current levels of services. He emphasized some of the challenges facing the City, such as a 20% increase in health care costs and a 40% increase in PERS costs. He talked about reductions in State dollars that flow back to Oregon communities such as Cigarette Tax, which could reflect a loss of $35,000 in revenue. He noted the potential loss of $190,000 from Qwest for Franchise Fees. Grimaldi pointed out that there were limits to what the citizens could afford to pay in rate increases. He concluded, saying that the proposed budget reflects the vision of the future of the community, which was established by the City Council during their annual goal setting.
Review Resources and Long-Term Plan
Tuneberg began the presentation by giving an overview of the Proposed Budget, describing each section. He talked about inflationary factors, assumptions and the budget process. He focused on the budget message on page 1-6, on page 1-10 pointing out the Budget Comparison chart. He noted on page 1-11 the Ending Fund Balance Comparison chart. On page 1-12, he referred to the chart on Proposed Increases in fees, and on page 1-13 he identified the revenue stream called Systems Development Charges (SDCs). He reviewed potential changes for the coming years, saying that SDCs become reserved monies if they are not spent on a project immediately. He discussed the Proposed Operational Budget Comparison chart on page 1-13. Tuneberg pointed out that the chart on page 1-14 detailed staffing levels and changes. He then spoke to the last table in the budget message, saying that it was a summary list of the Capital Improvements.
Williams asked about the security of the Ending Fund Balances. Tuneberg replied that overall the City was okay, but as Gino pointed out this year, proposed expenditures in the General Fund that will exceed revenues by $475,000. He said as far as reserves go Ashland has been forward thinking in setting those targets with the Ending Fund Balance requirements, which gives us flexibility in future years. He said that we need to focus on changing the direction in the areas where there is a negative fund balance, or the balance shows less than targeted. Williams asked about the Telecommunications Fund. Tuneberg said that there is no requirement set on the Telecommunications Fund and it is kept at a minimal level. He said another example of that is the Central Service Fund, where borrowing needs to be minimized. The discussion continued regarding operational costs and rate increases. Moore pointed out that on page 4-10 in the General Fund Long-Term Plan the year 2005 was left out. Discussion ensued regarding the Ending Fund Balances, Interfund loans, operational expenses and rising costs.
Review of Calendar
Tuneberg talked about the Departmental presentation process. The Committee agreed to vote on each department individually and then vote on the whole budget. The Committee discussed staff availability.
FINANCE - OPERATING 3-15 to 3-27
Tuneberg turned to page 3-15 of the Proposed Budget saying that the Finance Department’s budget is flat. He said the overall increase in the Operating Budget is $120,000, reflecting the staffing costs of the two positions that transitioned from the Parks Department. He referred to page 3-17, Fund 710, the Central Services Fund and explained that the two positions from Parks were reflected in the change. He discussed the handout mentioning the core goals and project list of the Finance Department; he said that the focus was on improving and prioritizing.
Stepahin asked about the impact of not getting additional staff. Tuneberg responded that it will be a challenge reallocating resources and keeping overtime to a minimum. He mentioned that their planning group called Mp6 (Mission Possible Six) look at prioritizing projects and workload efficiencies. Stepahin clarified that even with the integration of the Park’s staff, that Finance could make it through another year without additional staff. Tuneberg answered, that frankly, the Park’s transition increased their workload due to data conversions and accounting consolidation. He said their goal was to make it work.
Hartzell asked about what was not included in the Finance budget. Tuneberg replied that financings and rate models were examples of things not included. Tuneberg explained rate models.
There was discussion about healthcare costs and PERS.
Discussion ensued regarding SDC open space trending, Bancroft Debt and the Debt Service Fund.
Moore asked if there were savings due to parks consolidations. Tuneberg said in the long-term the savings might be cost avoidance and a savings in Central Service Fees from the Parks. He clarified that he has not calculated the savings. Levine asked if the consolidation with Parks was complete. Tuneberg explained that they are still working with the databases between each system in Parks and Finance. The payroll conversion is expected to be finished by June 30th. He talked about training on software that will support the Parks project accounting. He noted that the General Ledger would not be converted until sometime between July and September of this year. He pointed out that the Park’s Comprehensive Annual Financial Report will be produced by the City’s Finance Department.
DeBoer asked about the timing of voting on the proposal for an additional $25,000 for Social Services. Tuneberg noted that it would be covered in the Finance Non-Operating budget.
The Committee discussed GASB34.
Williams/ Moore m/s to approve the Finance budget as presented. Voice Vote: All Ayes.
CIP / PUBLIC WORKS
Capital Improvements Plan 2-1 to 2-93
Brown began by thanking the Finance staff and acknowledging the Public Works staff. She referred to handouts and summarized the FY04 $8 million Capital Improvements Plan (CIP). She directed the Committee to page 2-4 of the Proposed Budget for CIP and gave an overview. She talked about accomplishments, completed projects and noted completion dates for current projects.
Brown highlighted the Transportation Master Plan saying that grants are 46% of funding. She turned to page 2-5 and walked the Committee through an overview of current projects.
Brown continued the presentation, referring to the FY04 Water Master Plan, saying that as transportation goes down water goes up. She commented that the Water System was built in the 1920’s and the plant needed to be redone. She talked about the Talent Ashland Phoenix (TAP) Intertie Pipeline timeline. The Committee discussed trends, timing and the need for TAP.
Brown focused on the Wastewater Master Plan. There was discussion about the new Fire Flow Distribution Reservoir, and the difference between a supply reservoir and a distribution reservoir. The Committee discussed curtailment. Brown talked about temperature standards, saying that they are working with the State of Oregon Department of Environmental Quality (DEQ) to write a Temperature Management Plan.
Brown continued, moving on to the Storm Drain Master Plan, saying it will increase over time, due to increased spending for the Water Quality improvements. Morrison asked about accepted industry standards. Brown talked about SDCs, saying that they can only fund 50% of the Water Quality improvements.
Brown noted an error on the Airport Master Plan handouts that the Committee did not receive. She continued, talking about their work with the Oregon Department of Aviation. She gave an overview of grant funding. The Committee discussed grant funding and Federal programs.
Brown discussed the last three plans for: Electric, Facilities and Parks.
Public Works 3-51 to 3-81
Brown thanked staff and gave a PowerPoint overview of the Publics Works budget. She noted an error in the handouts. She said that the Operations budget was flat or declining and that they are doing more with same amount of staff. She noted an increase in the Public Works Administration budget due to a .5 FTE GIS position being moved to Public Works from the Electric Department.
Brown gave an overview of the fund summary. She talked about challenges, including the Street Fund, Water Bonds and rate models for SDCs, and PERS and retirements. Hartzell clarified stability with the Street Fund. Brown continued with the presentation talking about Materials and Services, saying that Debt Service is down due to the repayment last year on the Wastewater Treatment Plant. Moore clarified the increase on the Baseline for Personal Services.
Brown referred to page 3-55 talking about a new Grounds Maintenance program under the Public Works General Fund. She said that $135,000 goes directly to Parks to maintain Siskiyou Boulevard, Ashland Street, the entrances to the City and all of the downtown Parks maintenance. She noted a $15,000 increase from prior years, but said that it’s no longer in the Street Fund. She pointed out that $16,100 in line 602 was for street tree grates in the downtown area, due to complaints. The Committee discussed the potential for contracting outside services for landscaping.
Brown noted a large growth in the program overall, due to grant funds.
Brown said that Personal Services only went up 3.3%, Materials and Services went down, due to the $120,000 going towards Parks to maintain city grounds. She continued with the overview, saying that they are shifting towards responsive maintenance.
Brown detailed Water Quality improvements and requirements through the National Pollution, Discharge Elimination System (NPDS). She spoke to the difference between the Baseline and the Proposed Budget. She informed that if they need to look at cutting costs the level of service will go down.
Brown explained that Personal Services on the Treatment side went up, due to step increases. She said that the Distribution side was going down. She noted that the Water Fund operationally is doing very well. She discussed Water Fund comparisons from year to year. Hartzell asked about rate increases. Brown said they are looking at the long-term to balance costs.
Brown noted that Collections is down significantly, the Treatment Plant is higher, but overall the Fund is running less that 3%. She talked about the new plant being online, working on the biosolids portion and the collection systems root intrusion problems. She pointed out that the Debt Service was going down, due to payment to DEQ.
Brown gave an overview, saying that the increase in Personal Services was due to the .5 FTE GIS position from Electric and one full time temporary position doing GIS development. She said that in Materials and Services the Administrative side was down and the Engineering side was up.
Brown discussed Facilities Maintenance, and noted better control on water use.
Brown said that the Cemetery budget was flat.
She gave an overview of Equipment purchases on page 3-80, saying they were down this year. She said that there were zero new acquisitions this year, just replacements. Brown talked about Equipment and shop.
There was a discussion about the City’s equipment replacement, cost and conservation. Discussion ensued regarding the City’s safety program.
Hearn/Morrison m/s to accept the Public Works budget as presented. Voice Vote: All Ayes.
Tuneberg spoke about the Saturday Departmental presentation sequence. Morrison said the Proposed Budget was more readable this year.
The meeting was adjourned at 9:47pm.