Budget Committee Meeting

Minutes

May 15, 2008 6pm

Civic Center, Council Chambers, 1175 East Main Street

CALL TO ORDER

The Citizen’s Budget Committee meeting was called to order at 6:03 pm on May 15, 2008 in Council Chambers at 1175 East Main Street, Ashland Oregon.

ROLL CALL

Committee members Chapman, Douma, Gregorio, Hardesty, Hartzell, Heimann, Jackson, Morrison, Navickas, Silbiger, Slattery, Stebbins, Thompson were present.  Everson was absent.

STAFF PRESENT:       MARTHA BENNETT, CITY ADMINISTRATOR

LEE TUNEBERG, ADMINISTRATIVE SERVICES/ FINANCE DIRECTOR

                                    BRYN MORRISON, ACCOUNT REPRESENTATIVE

                                    DIANA SHIPLET, EXECUTIVE SECRETARY

                                    JOE FRANELL, INFORMATION TECHNOLOGY DIRECTOR

                                    KEITH WOODLEY, FIRE CHIEF

                                    SHAWN BRANAUGH, FIRE DEPARTMENT

                                    JIM OLSON, INTERIM PUBLIC WORKS DIRECTOR

                                    BILL MOLNAR, COMMUNITY DEVELOPMENT DIRECTOR

                                    ADAM HANKS, COMMUNITY DEVELOPMENT DEPARTMENT

                                    TERRY HOLDERNESS, POLICE CHIEF

                                    GAIL ROSENTHAL, POLICE DEPARTMENT

                                    COREY FALLS, POLICE DEPARTMENT

                                    RICHARD APPICELLO, CITY ATTORNEY

APPROVAL OF MINUTES

Approval of minutes from previous Budget Committee meeting dated 4/17/08.

Heimann/Slattery m/s to approve minutes of May 17, 2008.  Voice Vote: All Ayes.  Motion Passed.

PUBLIC INPUT

Mia Driscoll spoke about the importance of the CERT program in her life and encouraged the committee to do all they can to keep the CERT program in the final budget.

Committee member Chapman arrived 6:09 p.m.

COMMITTEE DISCUSSION

Committee had discussion about how to proceed with the discussion and gave overview of the handouts given from staff today regarding how much each potential cut equals in property tax cents.

City Administrator, Martha Bennett, began by stating we need to focus tonight’s meeting by answering the following questions: What is the desired ending fund balance?  What is the desired revenue increase (i.e. property taxes, utility rates, etc.)?  What is the “gap” between questions #1 and #2?  What does the committee need to cut to close that gap?

Committee gave comments as to what their comfort levels are in relation to the ending fund balance.  Discussed whether ending fund balances should be targeted based on current practices, or target getting through just this year or target dealing with the budget in the long-term.

Committee asked staff if bonding companies look not just at ending fund balance but also at our taxing structure.  Mr. Tuneberg explained that they look at all revenue streams and our ability to raise rates.

Committee continued discussing their comfort levels in relation to the ending fund balance.

Mr. Tuneberg reminded the group that parts of the ending fund balance shown in the years ahead include large amounts of borrowing – particularly in the capital funds.  You can’t equate decent amounts of projected end fund balance to fiscal stability or budgeting latitude.  Mrs. Bennett reminded the group that in the short term the ending fund balance issue might be easier but in the long-term it will be an even bigger problem.

Committee each gave their preferred ending fund balance levels.  Committee asked and received clarification about how franchise fee projections were established in the draft budget.  Committee did straw poll to see how many in the group are comfortable with 1.275 million as the ending fund balance about half the group were comfortable.  They had discussions about what range they are comfortable with and what this mean in regard to a possible property tax increase.  They agreed to start with a range of 1.275 to 1.5 million.

Committee began discussion of desired property tax rates.  They discussed their comfort levels for the various property tax increase rates and how long they believe the current financial downturn will take place.  Committee asked how much and when the most recent property tax increases or decreases occurred.  Committee asked if they chose to dip below the proscribed ending fund balance if that would affect their credit-worthiness.  Mr. Tuneberg explained that in order to get funding (such as bonds) and proper scores they need to make sure that the overall ending fund balance remains on target.

The committee asked for and received clarification on the Finance budgeting safeguards against spending too heavily into any reserve fund.  Committee had discussion on the possible tax level.  Some suggested levying entire 34 cent increase and others suggested no more than 17 cents.  Committee debated whether to focus on cuts or on total property tax amount.  They decided to focus on cuts and let those determine the tax amount.  They decided not to deal with the ending fund balance until after they determine the tax and the cuts.

Committee had discussions regarding dealing with the potential cuts and suggested focusing on the money rather than on specific personnel.  Discussed whether this was a better way to handle this versus being fair and honest about what services the committee wants to cut.  Discussed what level of cut they are interested in and how to make those cuts a permanent part of the budget.

Committee started by suggested cutting $150,000 from Police budget.  After discussion, it was determined that they might be more comfortable with $135,000.  Group discussed whether they would like to work from a goal of a total amount of $308,000 in cuts or if they should go individually by department.  There was a proposal to $75,000 cut from the Community Development Department.

The group decided to do a table of all the cuts they each would like to propose to see if they could gain consensus:

The Committee asked Fire Chief Woodley for clarification related to the service challenges that would occur with either the reduction in CERT FTEs or the loss of the Fire Inspector.  Committee asked and received clarification from Community Development Director, Bill Molnar, regarding Planning Department requirements for fire approval for all plans review.

Hartzell/Navickas m/s that the reduction in the Fire Department be $35,000.  DISCUSSION: None.  Roll Call Vote: Hartzell and Navickas: YES; Chapman, Douma, Gregorio, Hardesty, Heimann, Jackson, Morrison, Silbiger, Slattery, Stebbins, Thompson: NO.  Motion failed 2-11.

Heimann/Hartzell m/s to un-table motion from last night.  Voice Vote: All Ayes.  Motion Passes.

Tabled motion from last night:  Hartzell/Heimann m/s to reduce Police Department budget by $150,000.  DISCUSSION: None.  Roll Call Vote: Douma, Hardesty, Hartzell, Heimann, Morrison, Navickas, Slattery, Stebbins, Thompson: YES, Chapman, Gregorio, Jackson, Silbiger: NO Motion Passes 9-4.

Hartzell/Heimann m/s to reduce Com Dev Budget by 100,000.  DISCUSSION: Mr. Douma discussed his reasons for choosing $100,000 which is that he doesn’t see the Housing Specialist position as a currently necessary position.  Ms. Hardesty informed the group that the former housing specialist has been promoted and so there is no one currently working on housing issues.  She stated that after all the hard work of the Housing Commission she would be disappointed to see this position go away.  She stated that there are three ways to keep Ashland diverse; provide living wage jobs, provide affordable housing, and keep taxes and fees from skyrocketing.  Without the Housing Specialist we lose out on that opportunity.  Ms. Hartzell stated that her intention for this reduction was not specifically to focus on a particular position but for the department to take a look at its budget and find ways to reduce overall.  Mr. Silbiger advocated against also deciding to eliminate the code enforcement specialist because he’s seen more and more complaints from citizens regarding issues the specialist would handle. Mr. Navickas doesn’t support this cut because now is the time to focus on long-term planning. Mr. Chapman stated that if this motion were tied to the Housing Specialist position he would vote for it but he is worried it will instead eliminate two other positions.  Roll Call Vote: Hartzell: YES.  Chapman, Douma, Gregorio, Hardesty, Heimann, Jackson, Morrison, Navickas, Silbiger, Slattery, Stebbins, Thompson: NO.    Motion Failed 1-12.

Hardesty/Navickas m/s to make no cuts in Community Development at this point but they can come back and make cuts later if necessary.  DISCUSSION: Ms. Jackson wanted clarification on the last few motions and where that leaves us in regard to the General Fund.  Mr. Heimann stated that he thought the reason for the chart of cuts was to reach consensus among the group and that they should keep in mind many people suggested cutting $58,000 from the Community Development Budget.  Mr. Navickas stated we should consider the importance of planning to the livability of Ashland.  Voiced concerns about the merits of what the department has offered.  Ms. Hardesty stated that she put $58,000 on the chart thinking of the code enforcement specialist but after hearing Mr. Silbiger she changed her mind.  Ms. Thompson stated she is not advocating eliminating planning but believes that you can’t staff at all times to your highest level of activity.  Mr. Slattery stated that for him he has to decide which direction the economy is going.  They have to decide whether the economy will be crashing or whether we will be improving determining this will determine how much we need to cut.  He would support a moderate cut.  Ms. Jackson reminded the group of the balancing already done by the department based staffing levels versus the requirement to hire outside contractors to get the work done.  She is not willing to cut the department further.  Mr. Douma said it is difficult no matter what and to him long range planning is vital to the future of the city.  He just questions how much the loss of the code enforcement specialist would take away from the ability to do long-range planning.  Ms. Bennett stated that the busy time for code enforcement is the busy time for building inspection so planners would have to take over most of the responsibilities.  Additionally, they will depend on the Fire Department to take up some of the work related to weed abatement.  Roll Call Vote: Gregorio, Hardesty, Jackson, Navickas, Silbiger: YES.  Chapman, Douma, Hartzell, Heimann, Morrison, Slattery, Stebbins, Thompson: NO.  Motion Failed 5-8.

Navickas/Slattery m/s to cut Community Development budget by $50,000. DISCUSSION: none.

Heimann/Hartzell m/s to amend the cut amount to $58,000.  DISCUSSION: None. Roll Call Vote; Chapman, Douma, Hardesty, Hartzell, Heimann, Morrison, Silbiger, Slattery, Stebbins, Thompson: YES.  Gregorio, Jackson, Navickas: NO.  Amendment to Motion Passes 10-3.

Roll Call Vote on Amended Motion to cut the Community Development budget by $58,000: Douma, Hardesty, Hartzell, Heimann, Morrison, Slattery, Stebbins, Thompson: YES. Chapman, Gregorio, Jackson, Navickas, Silbiger: NO. Motion Passes 8-5.

Navickas/Hartzell m/s to cut the Fire Department budget by $30,000.  DISCUSSION:  Committee determined they had already done this motion and it failed.  Hartzell withdrew her second.  Motion fails for lack of second.

Stebbins/Douma m/s to reduce the Fire Department budget by $107,000.  DISCUSSION: Mr. Navickas raised concerns about the wisdom of eliminating the inspector position he believes that the Fire Chief will instead cut CERT.  Ms. Hartzell argued against the motion because without the fire inspector we are risking loss of life and property that we could have prevented.  Mr. Douma re-capped what he had heard tonight about the increase in turn around time for planning reviews from 5 – 12 days which is still within the acceptable time frame and that Community Development has people trained to do that review.  Mr. Navickas reminded the group that plans review is only a small portion of the inspector’s job.  Ms. Hartzell stated that in addition to plans review taking longer, many plans will not be reviewed at all and what also won’t get looked at is the streets planning.  She thinks street planning is necessary especially in a community so close to the watershed.  Mr. Heimann stated he didn’t believe the concern for CERT is accurate.  Roll Call Vote: Chapman, Douma, Gregorio, Hardesty, Heimann, Morrison, Silbiger, Slattery, Stebbins, Thompson: YES.  Hartzell, Jackson, Navickas: NO.  Motion Passes: 10-3.

The group discussed where they are in reducing the General Fund Budget overall.

Ms. Hardesty stated that she doesn’t like doing this, it makes her sad, but feels they have to take these necessary steps.

Committee discussed options for reducing funding in Central Services.  Committee asked for and received clarification on how the loss of one clerk in accounting or one clerk in cashiering may effect timeliness of processes.

Hartzell/Heimann m/s to eliminate the City Source Newsletter from the budget.  DISCUSSION:  Mr. Douma wonders how to have an active and informed citizenry without this tool. Ms. Thompson reminded the group that with the improvement in the health car costs we have actually already met the target ending fund balance in the Central Service Fund. Roll Call Vote: Gregorio, Hardesty, Hartzell, Heimann: YES.  Chapman, Douma, Jackson, Morrison, Navickas, Silbiger, Slattery, Stebbins, Thompson: NO.  Motion Failed 4-9.

The committee discussed options for setting the Library Levy rate.  A 19 cent increase keeps the library’s extra hours open for the full two years.  A 13 cent increase keeps the library’s extra hours open until the end of the fiscal year.

Jackson/Stebbins m/s to levy library tax rate at 13 cents.  DISCUSSION: none.  Roll Call Vote: Chapman, Douma, Hardesty, Hartzell, Heimann, Jackson, Silbiger, Slattery, Stebbins, Thompson; YES.  Gregorio, Morrison, Navickas; NO.  Motion Passes 10-3.

The committee discussed rate increases and whether they want to alter the current rates.  Committee asked for and received clarification on where they are on balancing increase in property tax and increasing the ending fund balance.  Committee reviewed how our rates compare with other cities in the Rogue Valley.  Had discussions about how lower water use relates to water revenues and how to balance the necessity of conservation with financing challenges related to processing water.  Commission discussed the long-term challenges of the current rates.

Committee discussed the add packages.  Ms. Jackson suggested that we leave those items related to the TOT in the budget and let Council determine this at their TOT meeting.  She suggested we add in the city employee continuity strategy and fiscal stability add packages.  Overall effect would be about 2 cents in property taxes.  Committee asked and received clarification regarding the requirements and information gained from the continuity strategy proposal.

Jackson/Silbiger m/s to include as ad packages $70,000 for employee continuity strategy and $84,000 for fiscal stability.  DISCUSSION: Ms. Hardesty questioned whether $84,000 would be enough to support this goal?  Mr. Tuneberg stated he is unsure, but it would fund a staff level accountant.  Roll Call Vote: Douma, Hardesty, Heimann, Jackson, Morrison, Navickas, Silbiger, Slattery, Stebbins; YES.  Chapman, Gregorio, Hartzell, Thompson; NO.  Motion Passes 9-4.

Hartzell/Navickas m/s to include strategic plan and economic development goals contingent upon council’s approval of the TOT increase.  DISCUSSION:  The committee discussed whether they should tie the goals into the increase in TOT funding or whether they should allow staff the ability to find alternate means of funding.  Hartzell/Navickas agreed to remove the ‘contingent upon TOT increase’.  Mr. Slattery recused himself from the discussion due to conflict of interest.  The Committee asked and received clarification on the previously dedicated funds for economic development.  Roll Call Vote: Douma, Gregorio, Hardesty, Hartzell, Jackson, Morrison, Navickas; YES.  Chapman, Hiemann, Silbiger, Stebbins, Thompson; NO.  Slattery; Excused.  Motion passes 7-5 but concern was raised that it was not passed by the 8 person majority required for budgetary restrictions.  If budget passes by a majority of 8 then this automatically passes.

Douma/Slattery m/s that we take $150,000 from the general fund contingency line item and give it to the ending fund balance.  DISCUSSION: Committee asked and received clarification on what the pros and cons would be with this balance.  Mr. Tuneberg reminded the group that without it being in the contingency line item they could do nothing with this money unless there was a major emergency.  He reminded the group that Council must approve any use of contingency funds.  Douma/Slattery withdrew the motion.

Hartzell/Gregorio m/s to increase property tax by an additional 5 cents as restricted funds to help the ending fund balance.  DISCUSSION: Committee asked and received clarification on how the finance department would handle those as restricted funds.  Committee discussed the reasons for increasing the ending fund balance and why this may or may not be a bad idea for the opinion of the public but necessary for the safety of budgets and the City in years to come. Roll Call Vote: Gregorio, Hardesty, Hartzell, Jackson, Morrison, Navickas, Silbiger: YES.  Chapman, Douma, Heimann, Slattery, Stebbins, Thompson: NO. Motion is 7-6.  Motion fails due to lack of necessary majority.

Committee asked for and received information about the property tax rate as related to how the actions and votes have gone thus far and what they still need to do to finish the budget approval.

Navickas/Gregorio m/s to approve property tax levy rate at $4.1297/1,000.  DISCUSSION: Mr. Gregorio reminded the group that even though Ms. Everson is absent she was interested in levying the entire amount.  Roll Call Vote: Gregorio, Hardesty, Jackson, Morrison, Navickas, Silbiger: YES. Chapman, Douma, Hartzell, Heimann, Slattery, Stebbins, Thompson: NO.  Motion Fails 6-7.

Heimann/Slattery m/s to approve property tax levy rate at $4.0797/1,000.  DISCUSSION: None.  Roll Call Vote: Chapman, Douma, Hardesty, Heimann, Morrison, Silbiger, Slattery, Stebbins, Thompson: YES.  Gregorio, Hartzell, Jackson, Navickas: NO. Motion Passes  9-4.

Jackson/Slattery m/s to approve Budget as revised and convey to Council for adoption.  DISCUSSION: None.  Roll Call Vote: Chapman, Douma, Hardesty, Heimann, Morrison, Navickas, Silbiger, Slattery, Stebbins, Thompson: YES. Gregorio, Hartzell, Jackson: NO. Motion Passes 10-3.

Heimann/Stebbins m/s to approve Bond Levies of $406,000.  DISCUSSION: None.  Roll Call Vote: Chapman, Douma, Gregorio, Hardesty, Hartzell, Heimann, Jackson, Morrison, Navickas, Silbiger, Slattery, Stebbins, Thompson: YES. Motion Passes 13-0.

Stebbins/Douma Motion to approve the Local Option Library Levy of $.13/$1,000 DISCUSSION: None. Roll Call Vote: Chapman, Douma, Hardesty, Hartzell, Heimann, Jackson, Navickas, Silbiger, Slattery, Stebbins, Thompson: YES.  Gregorio, Morrison: NO.  Motion Passes 11-2.

Group discussed when they would like to do a wrap-up of the budget process.  It was determined that they would meet on May 22, 2008.

ADJOURNMENT

This meeting adjourned at 11:20 PM.

Respectfully Submitted,

Diana Shiplet

Executive Secretary