Agendas and Minutes

City Council (View All)

Study Session

Thursday, November 09, 2006

November 9, 2006
Civic Center Council Chambers
1175 E. Main Street

Mayor Morrison called the Study Session to order at 5:15 p.m. in the Civic Center Council Chambers.
Councilors Hardesty, Amarotico, Hartzell and Silbiger and were present. Councilors Jackson and Chapman were absent.
1. Discussion of Long-Term Revenue Planning.
Administrative Services & Finance Director Lee Tuneberg presented the staff report and requested Council identify any areas of concerns or information they would like regarding the upcoming budget process. He reviewed the charts and the graphs provided in the Council Communication memo and noted five possible areas for discussion:
1) What disconnects do we see between services provided and related revenue streams.
2) Will the City need to discontinue any services in FY 2007-08 due to: excessive increased costs, diminishing or disrupted revenue streams, or other needs or service of a higher priority.
3) What capital projects are in the near future and how will they be funded.
4) What can be done now to plan for future projects and significant changes in revenue.
5) Aside from AFN debt, what other obligation and commitments are there and how are they paid.

Mr. Tuneberg provided an explanation of internal charges and central services and offered to meet one on one with councilors to further clarify. He also listed the following areas for Council to discuss: 1) the General Fund balance between revenue streams and services provided, and 2) City-wide debt and its impact or limitation on daily operations or future improvements.

Mr. Tuneberg commented on the General Fund Revenue and Expense Comparison charts located in the Council Communication. He noted revenue streams change from year to year and explained how staff extrapolates figures. He also noted that the Council Communication outlines the general obligation debt the City has, and what the debt service looks like.

Mr. Tuneberg recommended that the Council discuss the issues and concerns before they start the budget process itself.

Mayor Morrison questioned why there is not a separate fund for Fire or Police. Mr. Tuneberg clarified much of this is decided by the Oregon Budget Law and stated that services that do not charge adequate funding to support them are placed in the general fund. He added that the City has several services in the General Fund that go to the general benefit of the community.

Mr. Tuneberg commented on the extrapolations and stated that staff tries to be conservative and over estimate expenses and under estimate revenues. He suggested that staff return at the next Council meeting with an update on last years assumptions and how accurate staff's predictions were, and have Council provide guidance on what they would like the assumptions for the coming year to be.

Councilor Hartzell suggested they be more "forward thinking" and start to plan for possible reductions in services in the future. City Administrator Martha Bennett shared her experience with being involved with agencies that have had to reduce services and stated that Council could do some general planning and discuss priorities, but it is very difficult to determine in what services you will cut until you are placed in that situation.

Ms. Bennett noted the Council is scheduled to discuss the Capital Improvement Plan in December.

Public Works Director Paula Brown briefly commented on the Master Plans and noted that they are updated as part of the SDC process and brought before Council for adoption. Suggestion was made that these plans be included as part of a more integrated budget process. Additional comment was made that long term planning should not be done during the budget process.

Concern was expressed that the information brought forward indicates a deficit and request was made for Council to start look at this. Request was made for staff to prioritize which funds and services are the most risky and bring this information back for further discussion. Additional suggestion was made for Council to discuss alternate revenue sources and ways to increase the revenue stream without cutting back on services.

2. Discussion of AFN General Obligation Debt Service.
Administrative Services & Finance Director Lee Tuneberg presented the staff report and requested Council identify what additional information they require to determine which revenue stream(s) are to be used to meet AFN's long-term debt service payments. Mr. Tuneberg proposed three possible options for Council consideration and requested they provide direction on how staff should approach this issue:
1) Use a utility bill service charge to fund the annual debt service for technology used by enterprises.
2) Assess an internal change on all departments and funds for technology use.
3) Create a new revenue stream or divert an existing to pay the debt.

Councilor Silbiger voiced support for using a combination of property tax and a utility tax and suggested a cost benefit be obtained for the City's property across the highway. He commented that if they cannot identify a use for this property they should consider selling it to assist with the debt payment.

Information Technology Director Joe Franell provided an update on the development of a business plan. He noted he is meeting with the City Administrator next week to review the draft and expects to present the plan to Council in January.

Councilor Hardesty proposed an alternative to a flat percentage utility tax and suggested a tiered structure based on the amount of utilities used and the assessed property value. She voiced support for a method that would make it less burdensome for lesser income citizens.

Comment was made questioning the possibility of a City income tax. City Administrator Martha Bennett stated that this would have significant overhead costs and would require the City to create an administrative infrastructure.

Mayor Morrison voiced support for the "cafeteria approach" and noted that some residents will oppose paying the AFN debt regardless of what it is.

Support was voiced for looking into accessing an internal charge on the departments.

Mr. Tuneberg stated that staff would need direction from Council on how to address the debt payments no later than February. He stated that staff would update the materials provided when this issue was last discussed and bring it back to Council for further discussion.

Meeting adjourned at 7:15 p.m.

Respectfully submitted,
April Lucas, Assistant to City Recorder

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