MINUTES FOR THE STUDY SESSION
ASHLAND CITY COUNCIL
Monday, October 17, 2011
Siskiyou Room, 51 Winburn Way
5:30 p.m. Study Session
Mayor Stromberg called the meeting to order at 5:30 p.m. in the Siskiyou Room.
Councilor Silbiger, Slattery, Lemhouse, Chapman, and Voisin were present. Councilor Morris was absent.
1. Look Ahead Review
City Administrator Martha Bennett reviewed items on the Look Ahead.
2. What feedback does the Council have on the proposed revisions of the City’s economic, cultural, and sustainability grant program?
City Administrator Martha Bennett explained in the current fiscal year, 19.8%, or 37,450 of grant funds went to Economic Development activities, 13%, or $25,288 went to Sustainability activities with the remaining 67% to Cultural with both ScienceWorks and the Ashland Independent Film Festival (AIFF) receiving approximately 14% each.
Tourism was a major component in the Economic Development Strategy and some Cultural grants had tourism. Additionally, the Economic Development Strategy and State Law defined tourism. Ms. Bennett created bonus points for all grants if they assisted the City in meeting State tourism requirements.
Council and staff discussed whether to have a separate category for tourism. Having three categories with a point scoring system and another attribute that ran through them was an issue. Tourism could be separate or points built throughout the categories for tourism. The intent with the scoring system was to create flexibility. Ms. Bennett suggested removing the bonus points, retain the tourism category, and increase the non-bonus points.
She provided background on the 2003 State law that required municipalities to calculate the current amount spent on tourism as a percentage of the total tax and not let it drop below that amount. If that amount increased, 73% of the increased amount would to go to tourism.
She went on to explain a previous Council removed the Ashland Chamber of Commerce and Oregon Shakespeare Festival (OSF) from the general competitive grant program because they took competition away from the other grantees. Council applied a specific percentage that inflated annually according to the Transient Occupancy Tax (TOT). In 2007 the amount allocated went up substantially while the TOT experienced a reduction due to the economic down fall that would have dramatically increased the amounts OSF and the Chamber received leaving very little for small grantees. In response, Council began to award direct dollar amounts based on the prior year’s number and TOT projections. The Chamber received more than OSF because it provided general marketing for the entire business community. In turn, the City provided grant money to OSF because they market beyond 50 miles for people to attend their theater and that benefited the community.
Some of Council supported the bonus point strategy while others disagreed. Council and staff then discussed allocation splits for Economic Development, Cultural Development, and Sustainability grants.
Splits varied with one suggestion to fold sustainability and its criteria into Economic Development and Cultural and eliminate it as a category. Ms. Bennett noted Council could have tourism as its own category. Alternately, they could decide to eliminate the split, score it instead, and retain Sustainability as its own category.
Council discussed minimum grant amounts, whether to keep it at $2,500 or raise it to $5,000. Council majority was interested in exploring raising the minimum grant award to $5,000 while others thought smaller amounts allowed for more diverse and innovative organizations to apply.
Ms. Bennett clarified Council would initially score and rank the grants then allocate funds.
Budget Committee member Doug Gentry favored a lower amount for grants. He noted Council did not address the Budget Committee’s recommendation to establish a middle category for organizations like OSF and ScienceWorks. Ms. Bennett did not create this category purposely because it would require an overhaul of the grant process and she had not received clear direction from Council.
Budget Committee member Lynn Thompson was concerned there were significant policy shifts from Cultural towards Economic Development and the criteria might not provide enough flexibility to make the best decision.
Budget Committee member David Runkel noted Ashland was the only municipality in Oregon that went through a grant process. Most other jurisdictions had Council devise a set plan on allocating money. Additionally, the Budget Committee spent an enormous amount of time on grants.
Ms. Bennett would write a preamble to reflect Council’s intention regarding grants, adjust the weights for Sustainability, develop Tourism as its own category for scoring, and balance the criteria.
Councilor Chapman suggested using percentages instead of numbers.
3. Does Council have direction for staff related to working capital that carried over in the General Fund and Parks & Recreation Fund from the prior fiscal year that exceeded the amount that was included in the adopted budget?
City Administrator Martha Bennett clarified if the excess funds went towards the Water and Wastewater funds it would reduce the rates for one year but not eliminate the need to raise them the following year. Interim City Administrator Lee Tuneberg added there was a Water Fund and Wastewater Fund adjustment during the Budget Process that paid $290,000 to the General Fund as franchise payments.
Ms. Bennett explained there was enough money to fund the firefighter and police officer positions for five years.
The Parks and Recreation Commission strongly supported using the Ending Fund Balance excess to address deferred maintenance issues in the Parks and Recreation Department that added up to approximately $3,000,000.
Budget Committee member’s suggestions varied. Some thought the reserves were adequate and the City should give back to the taxpayers. Another did not support applying it to the franchise fee. This was a one-year windfall. It may reduce the impact on water rates but could create a larger catch-up the following year. Another favored reallocating money to the public safety positions, some into the reserve fund and possibly into the future AFN debt payment to relieve pressure on the General Fund. Eventually the City would have to address the $2.09 Parks tax.
Mr. Tuneberg referenced a meeting with Moody’s that rated the City AA3 but was not impressed with City reserves compared to similar municipalities. A larger reserve and Ending Fund Balance would help the City with loans.
Council supported transferring money into the reserve, designating money to hire the public safety positions the following year, and doing nothing with the remainder. Other suggestions included waiting for the budget process to proceed.
Staff would bring forward a proposed transfer from the General Fund into Reserves with an option to create but not fund two public safety positions.
Mayor Stromberg suggested eventually creating a Joint Committee that would prioritize what goes into Parks and Recreation and the General Fund.
Meeting adjourned at 7:15 p.m.
Assistant to the City Recorder