Agendas and Minutes

City Council (View All)

Study Session

Thursday, October 12, 2006

October 12, 2006
Civic Center Council Chambers
1175 E. Main Street

Mayor Morrison called the Study Session to order at 5:20 p.m. in the Civic Center Council Chambers.
Councilors Hardesty, Hartzell, Jackson and Chapman were present. Councilors Amarotico and Silbiger were absent.
1. Discussion of Goals for Transient Occupancy Tax Use.
Administrative Services & Finance Director Lee Tuneberg presented the staff report. He stated staff is requesting Council discuss and provide guidance on the use of revenue generate by the Transient Occupancy Tax (TOT), and explained the current TOT resolution has a sunset clause and the resolution will be expiring soon.

Mr. Tuneberg listed the following topics for Council discussion:

• How much do we get each year?
• What percentage of TOT revenue does Council want to go to the General Fund and what percent go toward economic development and visitors convention services?
• How could we increase the funding for visitor services or economic development?
• What other activities could the City fund with these revenues?
• Can we raise the TOT rate above 7%?
• How can we give better direction to the Budget Committee in awarding grants?
• Should the Chamber of Commerce and Oregon Shakespeare Festival do an annual application for the amount they need for that year's activities or should they receive a fixed amount?
• Should someone other than the budget committee award the grants?
• How do we ensure that the money granted is used as intended and effectively?
• Should we do two year grant awards like the City does for social grants?
• Should we have a more streamlined application process and/or reporting for very small grantees?
• Do we have particular goals for visitors services that would change the application process?

Council discussed the reasoning behind allocating a fixed dollar amount to the Chamber of Commerce and OSF made in Resolution 1998-02. It was explained that this was done to give some predictability to the larger organizations and it recognized that these organizations were different (comment was made about comparing "apples to oranges" and that this Resolution fixed that).

Mr. Tuneberg provided an explanation of the change that occurred three years ago regarding the State statute on the amount of money spent on tourism and stated this change required the City to change its process. He stated when the law came into place, the City was required to look at what it spent on tourism the year before and that dollar figure had to grow with the budgeted revenue. He clarified the State sets constraints on the use of this money and noted the dollar amount spent on tourism cannot decrease. He also clarified the definition of "tourism" is set by the State, however the City has the ability to define "cultural development".

Councilor Jackson commented that the smaller grantees generate a lot of work for staff, and the Council should be conscience on this. Additional comment was made that the amount of money awarded to these grantees is sometimes less that what it costs for staff process. Mr. Tuneberg noted the minimum grant the City awards is $1,000 and agreed there is substantial work to administer the grants and voiced support for making this process smoother.

Comment was made suggesting the City evaluate the grants in terms of the following goals: 1) cultural development, 2) economic development, and 3) meeting and State's tourism requirement. City Administrator Martha Bennett voiced support for this suggestion and noted that some of the money awarded will address all three categories.

Council continued their discussion on how to address the questions listed by Mr. Tuneberg. Suggestion was made for the Council to tackle the hard question of "What do we want to accomplish with this money" first and then let the form follow later. Mr. Tuneberg agreed that Council should define what they want to accomplish first and then fine tune or restructure the process afterwards. He added that it would be great if the Council could define what they want to accomplish before the grant applications go out at the beginning of the year.

Council briefly discussed the possibly of raising the tax and/or using the TOT money for other uses, such as paying down the AFN debt or using it to fund the start up of an Economic Development plan. Mayor Morrison voiced his concern with discussing a possible raise in the tax before determining what this money would be used for.

Ms. Bennett suggested the City's Comprehensive Plan would be a good starting place for Council's discussion on what they want to accomplish. She stated that staff could put together a tentative list of goals/outcomes and survey other communities to find out what their TOT is. She requested that each councilor make a list of what they want to accomplish with the TOT funds and submit it to staff. Staff will compile this information and distribute it to the Council.

Mr. Tuneberg clarified the minimum action the Council needs to take before the next budget season is to adopt another resolution.

2. Discussion of FY 2007-08 Budget Process and Calendar.
Administrative Services & Finance Director Lee Tuneberg explained that the budget process goes on all year long and that the guidelines are laid out by the State. He commented on the surveys that were received from the Budget Committee members and submitted the results of those surveys to the Council. He also noted that the budget process and history is included in the staff report.

Mr. Tuneberg commented on the elements that lend to the complexity of preparing the final budget document, which include:

• Setting Council goals.
• Updating financial plans and rate models.
• Capital Improvements.
• Social and Economic grant processes.
• Including the Parks Commission budget within the City's process and document.

Mr. Tuneberg reviewed how the City works to train the Budget Committee, and noted that regional classes are held, he walks the members though the "Ashland way", and also meets one or one or is small groups with the members to help them better understand. He stated the process seems to work well and questioned if the Council would like to make any changes.

Mayor Morrison commented on how to make people more comfortable at the meetings and suggested serving coffee, tea, and cookies. He also questioned if there was a way to more clearly delineate what in the budget is constrained and what is not and to break it out so it is obvious to the Committee.

City Administrator Martha Bennett stated that the budget is a plan and they need to have clear goals and objectives from the outset. She stated it is all about what services the City wants to offer and at what level.

Councilor Chapman shared his perspective of going through the budget process last year and felt as if most of the decisions had been made by the time it came to the Committee. He requested that staff more clearly indicate what they would need to do to meet budget targets and identify possible repercussions.

Mr. Tuneberg explained that there are kick-off meetings in January or February of each year to discuss trends, revenue streams and this gets presented as a preliminary list of assumptions. He clarified at this point staff has not started to develop their budgets.

Councilor Hartzell suggested the budget process start earlier in the year. She stated she would like to see the Council make some clear decisions to give staff guidance and suggested increasing communications with the Committee members throughout the year.

Mayor Morrison noted the importance of the Council having their goals set. Ms. Bennett noted there is a Study Session scheduled for November for the Council to discuss the goal setting process and stated the Budget Committee members would be invited to attend.

Meeting adjourned at 7:05 p.m.

Respectfully submitted,
April Lucas, Assistant to City Recorder

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