Full Budget Committee: Wrap-up/Budget Approval
May 17, 2001, 7:00pm
City Council Chambers, 1175 East Main Street
Present: Alan DeBoer, Cate Hartzell, Chris Hearn, Don Laws, Marty Levine, Jim Moore, John Morrison, Susan Reid, Russ Silbiger, Regina Stepahin, David Williams
Absent: Howard Braham, David Fine, Cameron Hansen
Staff: Greg Scoles, Lee Tuneberg, Paula Brown, Alan Drescher, Kirsten Bakke
Others: Miles Murphy of the Ashland Daily Tidings
CALL TO ORDER
Levine called the meeting to order at 7:04 p.m.
APPROVAL OF MINUTES
Approval of minutes from previous budget subcommittee meetings dated:
1/18/01 Budget Committee - Introduction
3/07/01 Economic and Cultural Development Grant Presentations
3/08/01 Economic and Cultural Development Grants Continued
3/14/01 CDBG Presentations
3/19/01 Social Services Grant Presentations
5/03/01 Full Budget Committee Meeting - Budget Message, CIP/Public Works
5/07/01 Parks, Finance, Community Development
5/10/01 Electric / AFN
5/14/01 Administration and Legal, Administrative Services, City Recorder
5/15/01 Municipal Court, Police, Fire
Hartzell suggested postponing the approval of the minutes until the fall meeting.
Scoles said that there is an action table attached to the memorandum and whether they approve the minutes or not is a secondary issue.
Williams suggested a correction to the wording for the minutes of the AFN meeting on the last page were changed from stipulation to recommendation.
Williams moved to defer approval of minutes. Hartzell seconded. ALL AYES.
There was none.
REVIEW BUDGET ADDENDUM:
Scoles thanked the Committee for their diligence in this process. He began by explaining the Fiscal Year 2001/2002 Budget Addendum dated May 17, 2001. He said in the first budget package there was a memorandum dated April 27th, where staff suggested the Budget Committee consider some additional non-staff modifications to the proposed budget, as follows:
1. Fund the Strawberry Lane Improvements Project. This will require an increase in the Street Fund.
Staff recommends that this item be incorporated in the proposed budget.
2. Increase the participation in RVCOG by adding $5,273 in additional annual support for cash flow purposes, funded by a decrease in the fund balance for the General Fund. The Council has approved the request subject to review by the Budget Committee.
Staff recommends that this item be incorporated in the proposed budget.
3. Reducing fund balances for the General Fund and Parks & Recreation Fund. Staff is proposing to reduce the fund balances by:
a) Reducing the property tax rate by $0.13/$1,000. This would reduce the rate from $3.62 to $3.49. This rate reduction would result in reducing the Parks & Recreation fund balance by $40,000 and the General Fund balance by $129,000.
b) Modify the proposed electric rate increase. The proposed budget anticipated a 20% increase in the Retail Electric Rate charged to consumers. This rate would be subject to the franchise fee (10%), and the Electric Utility Users Tax (25%). Staff is proposing that the proposed rate increase be modified to a 10% base increase and a 10% surcharge which would not be subject to the Franchise Fee or the Electric Utility Users Tax. This modification would result in substantial rate relief and would reduce the General Fund balance by approximately $250,000.
Staff recommends that the above reductions be incorporated into the proposed budget.
Scoles said that in their review of the budget for the Ashland Fiber Network (AFN), some members of the Subcommittee felt that it would be appropriate to establish a process for a more regular review of the performance of AFN. In fact, the Subcommittee did not make a recommendation on this portion of the budget since 4 of the 8-subcommittee members wanted assurances that there would be a process developed which would provide for regular review of AFN. As indicated in the subcommittee meeting, staff is very supportive of this idea and will be developing a recommendation for council consideration.
Tuneberg went over the detail of the table on the back page of the Budget Addendum titled Summary of Revised Requirements by Department.
Administration Department - adjustment of $5,723 for additional support to RVCOG.
Finance Department - taking 2 clerks from part-time to fulltime in lieu of temporary and overtime for no change in the dollars proposed.
Finance Department, Non-Operating Fund - increase the revenue $600,000 and the appropriation at $600,000 to allow OSF parking lot to include all pass through funds.
City Recorder - increasing Secretary position from .5 to .75 FTE and increasing budget $10,000.
Police Department - addition of Police Officer adding $58,000 and adding $58,000 to traffic revenue.
Fire Department - Fire Fighter funded in lieu of overtime – no impact on dollars.
Public Works - Treatment Plant Operator – no impact on dollars. Strawberry Lane add $582,000 and add temporary financing revenue.
Community Development – Adding the Building Inspector in lieu of temporary pay - no impact on dollars. Forester position not included.
Electric Department - increase Secretary position from .5 to 1.0 FTE funded by staff reduction - no impact on dollars. Adding a Warehouse position that is partially funded by the staff reduction so we see a $40,000 increase there.
Non-departmental - Reflects Interfund Loans, Operating Transfers, Contingencies, impacts that go against the Unappropriated Ending Fund Balance:
Additional support to RVCOG ($5,723)
Increase Secretary Position from .5 to .75 FTE ($10,000)
Add Warehouse position partially funded by staff reduction ($40,000)
Reduce Property Tax Rate $.13/1000 valuation ($169,000)
Reduction due to shifting 10% electric rates to surcharge ($250,000)
Scoles also pointed out on the second page of the Budget Addendum that the staff recommends the Budget Committee approve the proposed budget for FY2001/2002, as modified, and to also approve that the City of Ashland levy property taxes in the following manner:
1982 Water Bonds $ 83,000
1992 Water Bonds $100,000
1997 Flood Restoration Bonds $ 95,000
2000 Flood and Fire Station Bonds $300,000
Williams asked how Scoles envisioned the AFN monitoring process working. Scoles responded that at a minimum it would have benchmarks based on the business plan including market penetration, revenue, and expenditures. Also he spoke about a steering or advisory committee for the staff that we could take and have various specialties on that committee, as a resource for the staff in developing a reporting system to take to the council. There was a discussion about the composition of an advisory committee.
DeBoer said at the end of this meeting he was asking for volunteers for an advising staff. Scoles said there were process issues to work out and that a committee appointed by the Major or the Council is different than an advisory committee to the staff. Morrison said we need to have more review and accountability. Reid agreed and added that the advantages of an ad hoc committee that ran minutes and notified the community versus a staff committee that would advise staff and meet on a more impromptu basis. There would be advantages to both. Laws said he doesn't want to wait three months for the first report, he would like an immediate report of new plan. Moore said the letter received from John Nickelson regarding the possibility of a performance audit. Hartzell clarified that the vote was only 4 to 4 split because of the word clarification that David made a point of to implement some accountability guidelines in terms of reporting requirements for council to be able to guide this process. There was continued discussion about volunteering.
Moore confused about Strawberry Lane project. DeBoer said it was a placeholder. He added that the lot at the top of Strawberry Lane could be sold to help fund the project. Reid said she supported putting in the placeholder and selling this property to help fund Strawberry Lane.
Moore asked how much was currently in the budget for this project. Scoles said total project cost is $1,070,000. Hartzell asked for clarification regarding the funding. Brown explained that the funding for Strawberry Lane takes into account the LID for the Developer portion, the LID for the homeowners in that area, and then SDC's for storm drain, streets, and fees. She said its all broken out based on the estimate of the project cost. Reid said there are developments that are going in off of Tolman Creek and that would contribute to it. Brown said the developer portion is already on the books for their cost. Reid was concerned about missed opportunities for funding because of our delay. Brown clarified that there are county funds, the economic development monies as presented originally didn't come back favorable for the City, and she can’t give funding projection tonight. Brown replied that the delay is not the cause of any missed opportunities. Scoles agreed and confirmed what Brown said about the State coming back to us last week denying grant money but offering a loan for some of the money. Brown explained that there are different grant opportunities although these are all unknowns today, definitely something to look forward to in the future as Tolman Creek is there to do.
Hearn asked at planning commission last month they approved a subdivision adjacent to Tolman Creek, where did those Tolman Creek road estimates numbers come from. Brown said they have an old estimate for Tolman Creek Road and they are very broad cost level estimates. Scoles said that Tolman Creek was in the Capital Improvement Plan. Hartzell asked if there was money in the budget for the intersection Brown replied that for Tolman Creek Road there is $184,000 in the Capital Improvement Plan for the intersection at Siskiyou. Hartzell questioned the $582,000. Brown said $582,000 is the budgeted project amount for FY02. Scoles clarified that the funding sources are from us and partially from LID's, so its not just our obligation. Laws pointed out that the City's obligation could be bancrofted, which would mean that we would pay it over a period of ten years.
There was a discussion regarding RVCOG. Morrison left the room prior to the discussion due to a conflict of interest.
DeBoer gave public input from the community regarding the halftime officer at the High School and a halftime position at AMS, and the School District's request to increase to a full time officer at the High School which is a $28,000 budget item. Laws said he was reluctant to make a change without any input from the Police Chief or the department. Scoles responded that he talked to Police Chief today about this issue and he said that June 15th is a deadline for a cops grant where they could get funding for a School Resources Officer, and then come back to the Council to fund the $14,000 split. Moore said it would be money well spent. Scoles said he didn't have all the details but Scott seemed to think it was a good opportunity to take care of part of the issue that the High School is considering.
Reid concerned that the Police Officer was funded by traffic revenue. Scoles said that Scott did an analysis of citations generated by one individual to determine the net revenue from a vehicle enforcement officer would be. Reid said she felt that a motorcycle officer more efficient. She added that she dislikes funding a position out of traffic tickets. Levine said the nature of this officer is that the revenue will result. Moore said an additional officer for certain cases, to increase safety requests two officers in the same place.
Hartzell asked about the justification for a department to request more staff. Volunteers could be utilized. Laws said that the Chief did give a full analysis of the problem and that there would be enough revenue to support this position. Scoles said decisions about staffing made by analysis by an outside firm on shift work, optimal staffing level, etc. and that study shows the department could use additional patrol staffing. He said it could be as high as three additional staffing needed. He explained that we show a smaller fund balance or we increase property tax to fund the position. Reid said can’t support this with funded by traffic revenue. Levine clarified that there was no guarantee the Police Officer was going to be a motorcycle officer. Moore said that if we do get another traffic officer we are going to increase revenue. Silbiger said that technically the Police Officer is funded by general fund revenue. There was continued discussion on this issue. Scoles said that we would show the revenue source as a smaller ending fund balance, during the year collect additional revenues of fines and forfeitures because of the increase in activities and then that shows as carry forward revenue for the next fiscal year.
Reid spoke of the General Fund and reducing property tax by .13 cents. Laws said that as much of that $500,000 as possible should be put into that general fund contingency to minimized the impact of electrical increases to our citizens. He continued that he would like to shift it from Unappropriated Ending Fund Balance to the Contingency so that it could be used as a program is developed for it. Reid said that it would be disproportionate. Williams has trouble with the notion of using property tax to subsidize electric ratepayers. Levine said we could eliminated 3a and increased 3b by an equal amount. There was a continued discussion regarding the General Fund carry forward, property tax reduction, and relief to our citizens for electrical rates.
Levine suggested a 5-minute break.
Tuneberg talked about setting up an Electric Rate Assistance fund or not raising our property tax rates as high. Money in the General fund cannot be earmarked as being any one revenue source and the only way to move funds from contingency is through a Transfer of Appropriation which can only be done by the Council. Morrison clarified that we have a carry over that exceeds our guidelines and he supports Laws' view to switch the carry over into contingency. Tuneberg explained that if you leave it in the Unappropriated Ending Fund Balance and set the budget at that level we cannot do anything with it for a year. There was more discussion.
Williams motioned that the Property Tax Rate be reduced from $3.62 to $3.56 and the difference go into the Contingency Fund however the Council might choose to direct it. Reid seconded.
Hartzell concerned about not cutting the budget. Laws said to put as much money as possible into the reserve and earmark it for rate reduction only. Levine said that this proposal doesn't do that. Levine then asked if Laws would consider amending his proposal to earmark the contingency reserve amount to be used just for rate relief by the Electric Utility or adjusted by a future budget committee if not needed for that purpose. Laws said his proposal is to put the entire $500,000 into this reserve and he's willing to earmark it, the Property Tax reduction would reduce that reserve. Williams said that the motion as it stands now would allow more than half of the $500,000 to flow into the Contingency Fund. Levine questioned if Williams motion addressed part b. Williams said yes it did. Levine clarified that by not mentioning part b in the motion it is included implicitly. Levine confirmed that Williams motion proposed that we have a .07 cent property tax reduction no adjustment regarding the utilities and leave the difference in the General Fund, so we'll end up with a General Fund of somewhere around $1.4 million. Williams said he assumed that that $350,000 would be used at the discretion of the Council. Williams said that a and b flow together here. DeBoer clarified that Williams was in fact leaving more to the Council's discretion by changing the Property Tax reduction from $3.49 to $3.56.
Hartzell asked for clarification of the difference between b going into contingency versus ending fund balance and the flexibility. Tuneberg explained that if you look at b, when we shift 20% base increase to 10% increase and 10% surcharge effective July it has a $250,000 impact on the General Fund. In that on the surcharge there is no franchise fee or the utility tax. DeBoer clarified that in Williams motion by not going to $3.49 and going to $3.56 is going to give you about $90,000 more than asked for into reserve.
Levine said that under staff proposal, $250,000 is directly going to reduce utility tax bills, and $169,000 is directly going to reduce property tax bills. He continued that under Williams's motion the $250,000 would remain, the $169,000 property tax bills would be reduced to roughly $90,000 and there would be an overage of a difference, which would be $90,000. There was continued discussion on this issue. Williams suggested voting on the motion.
Roll Call Vote: DeBoer, Hearn, Moore, Morrison, Reid, Silbiger, Stepahin and Williams -YES. Hartzell, Laws, Levine - NO. Vote on motion: 8 to 3 votes. Motioned passed.
COMMITTEE APPROVAL OF 2001-2002 BUDGET
DeBoer motioned to accept the budget as modified. Reid Seconded.
Hartzell spoke of minutes for the Community Development subcommittee meeting and the request for an Urban Forester position. She asked Tuneberg to address the notes of the meeting. Tuneberg clarified if there would be a revenue source with that position and it fell short or the cost of the program overran what we had originally proposed, it could be funded in mid year through contingency. Reid understood that we have had contracts for this position. Tuneberg said in the discussion Community Development talked about doing some of this work from existing staff or other departments. Laws clarified that the Urban Forester position did not include the watershed area. Levine reminded that there was a motion on the floor. Hartzell said that this was pertinent to it and the Forester position comes from water fund. Scoles said that as the program got developed the Council bought into the program then we find a way to make that work.
Scoles clarified that the motion was for staff recommendation including the Levies. And based on the motion that was just passed about the rate, we will want to adjust the rate in the first bullet point on page 2 of the Budget Addendum as follows:
DeBoer repeated the motion to approve the staff recommendations with the adjustment of the rate as $3.5642.
Roll Call Vote: DeBoer, Hearn, Laws, Levine, Moore, Morrison, Reid, Silbiger, Stepahin, and Williams, Hartzell - Yes. Morrison abstained from the vote pertaining to RVCOG since he is an employee of RVCOG. Don Laws abstained from the vote pertaining to the Senior Program since his wife is the Director. Motion passed.
Williams asked about the budget supplement. Tuneberg said that was in the information that was handed out a week ago. Scoles explained that it made current budget consistent with the budget your looking at.
Levine thanked everyone for his or her participation. He especially thanked Greg and Lee for having the information so readily available and easy to understand.
Levine motioned to adjourn the meeting. ALL AYES. Meeting ended at 9:18 p.m.
Respectfully submitted by Kirsten Bakke, Administrative Assistant