Minutes for the Citizen Budget Committee Meeting April 26, 2012 Civic Center Council Chambers 1175 East Main Street
CALL TO ORDER
The Citizens Budget Committee meeting was called to order at 6:01 pm.
ROLL CALL & INTRODUCTIONS
Committee Members David Chapman, William Heimann, Chuck Keil, Michael Morris, David Runkel, Russ Silbiger, Denise Daehler, Roberta Stebbins, and Lynn Thompson were present. Carol Voisin, Greg Lemhouse, Dennis Slattery and Mayor John Stromberg were absent. Douglas Gentry arrived at 6:07 pm.
APPROVAL OF MINUTES NONE
PUBLIC INPUT NONE
ADMINISTRATION
City Administrator, Dave Kanner presented the budget presentation. Mr. Kanner discussed some of the outcomes for 2012:
Administration oversees the policy direction and implementation
We have increased HR budget this FY for training to ensure that newly hired staff and long term employees remain current on safety and workplace policies, with the goal of preventing injuries and/or employment related claims.
74% of the community rates our public information as excellent or good. Staff continues to seek ways to improve public outreach. 64% of the community rates the City as excellent or good at welcoming citizen involvement.
The Legal Department reviews and updates ordinances as needed for Council approval.
Per the Economic Development Strategy, the City works with partners to enhance the work of economic development.
Most recently, the City in conjunction with the Chamber of Commerce completed the Business Retention & Expansion study (BRE). Results will be provided to the Council in June.
35% of the community report Ashland is excellent or good at economic development.
He went over a few key points within the departments:
Plan to consolidate economic development and conservation within the City Administrator office
The City completed the business and retention study
The court is headed by a municipal judge. The Municipal budget is down due to a long term employee leaving
The same thing is happening in the legal department with the contracted city attorney
Funds have been budgeted to move to a paperless employment application system
17 employees retired last year and the hiring of new employees is generally less productive during the initial training period
Public Education and Development (PEG) fees collected continue to decline each year while costs to broadcast (council meetings) go up
Due to high employee turnover and loss of institutional knowledge it is becoming more difficult to maintain a ratio of 12/1000
Due to high employee turnover and loss of institutional knowledge it is becoming more difficult to maintain a ratio of 12/1000
Mr. Kanner pointed out that typically cities estimate the population as of July 1 and then reset it when the census comes out, he also noted that the city doesn’t generally budget based on the population.
Discussion was held regarding there not being any economic development activity despite the council through resolution establishing how much could be spent for each program. For 2012 the numbers don’t match what was approved by council. Mr. Kanner noted that the Assistant City Administrator they hire would be the Economic Development specialist. Mr. Tuneberg noted that the point was well taken by the committee and went on to say that there are no expenses in that budget. When they approved the Assistant City Administrator position that 40K allocation was moved over.
Mr. Kanner indicated that the personnel budget shows 1.0 FTE for the Assistant City Administrator which is .60 out of the Central Services Fund and .40 from the General Fund.
Contractual Services Kanner 85K was set aside to finalize the Urban Renewal plan and activate an Urban Renewal Agency. A portion of the revenues are coming from Transient Occupancy Taxes. Ashland treats the TOT’s as a General Fund Revenue source. A portion of that is dedicated to tourism promotion and economic and social tourism grants and then a small piece is an unrestricted General Fund source. The state law actually says that any city that collects TOT’s must spend a portion of that on tourism promotion and Tourism related facilities.
Mr. Kanner noted that the primary reason for the increase in the Personal Services budget is the Assistant City Administrator and is shown in the Administration Budget.
It was noted that the 2012 year end estimate for Fringe benefits shows an error in the budget and should read 76K (will be corrected).
Discussion was held regarding a .5 FTE position being approved earlier in the year for the Municipal department. The .5 position is budgeted in the budget. A long term clerk turned over and that’s been a training process in itself so there weren’t enough resources available to train 2 people. They are planning to fill that position.
ADMINISTRATIVE SERVICES
Administrative Services & Finance Director Lee Tuneberg gave the Administrative Services budget presentation. Mr. Tuneberg went over a few key elements within the department:
18 people and even a Band
Collect about $26 million in Customer service
Support all divisions/departments and Funds through Accounting, AP and Budget
Perform Parks accounting
Manage risk and insurance
Award winning budget and CAFR
It was noted that there was an error on the 2013 Proposed FTE’s for the Finance department.
INFORMATION TECHNOLOGY
Administrative Services & Finance Director Lee Tuneberg gave the Information Technology presentation.
Mr. Tuneberg went over a few key elements within the department:
14 people taking care of AFN and the internal technology system
Half of a Director
Cuts to balance with activity
Utilities & bandwidth costs
Still paying toward the AFN debt
Equipment replacement
Licensing costs
Dealing with changes in staffing/industry and keeping up with technology
There was a discussion on why the number of cable subscribers and internet subscribers has decreased. Mr. Tuneberg stated that the city is trying to deal with advertising and encouraging more users. He noted that they do the best they can to monitor why users leave. It could be in part due to competition and seasonal fluctuations too. AFN Operations Manager, Michael Ainsworth spoke of rolling out the first stages of the newest technology and down the road possible infrastructure changes.
ELECTRIC
Administrative Services & Finance Director Lee Tuneberg gave the Electric budget presentation. Mr. Tuneberg went over a few key elements within the department:
22 people keeping the lights on and conserving electricity
Half of a Director
Wholesale power up 9% in Oct 2012
Transmission/Delivery up 9%
Buy the substation +/-
Cost Recovery Adjustment Clause
2 “E” & 1 “W” specialists
Managing through vacancies
Mr. Tuneberg noted that the .5 FTE water conservation position in the budget would be to help conserve an additional 5% of water rather than needing to increase the supply. Also, the .5 FTE increase would allow for more irrigation audits. Instead of it taking approximately 13 years it would lower that down to 9 years.
Discussion was held on the electric rates increasing by 4% last year, another 4% this year and another 5% is being budgeted this year but the ending fund balance continues to increase. Mr. Tuneberg stated that every year the rate increases occur; we’re budgeting for the worst case scenario. The electric fund has the luxury that some others do not have, in that if there’s no sale then power doesn’t have to be purchased. We don’t see that revenue stream that we were anticipating but we also don’t see the increased expense in the odd seasons. This fund has struggled with vacancies at the top. The fund varies quite a bit due to weather and conservation efforts.
Project Manager/Strategic Planner, Adam Hanks explained that the Conservation Potential Assessment looks at the service territory and the likelihood to reach that next level. They look at lighting retro fits and what new technologies might be out there and also looks at what has already been done.
PUBLIC WORKS
Public Works Director, Mike Faught, Engineering Services Manager Scott Flurry and Public Works Superintendant Mike Morrison gave the Public Works budget presentation (see attached slides).
Mr. Faught described the Efficiency Plan as follows:
Purchase 8 tablets to help employees take and store real time data
Facilities energy audit, looking at power, gas and solar opportunities
Continued fleet “right sizing”.
Efficient Driver/Operator training
He spoke to the challenges for the Public Works department:
Regulatory compliance
Aging infrastructure
Staffing, need to deliver on all projects
Capital Improvement delivery
Mr. Faught spoke to some of the accomplishments of the Street department:
325 asphalt patches
5,000 curb miles of street sweeping
Sign maintenance, 90 new regulatory signs
Street painting
Weather related emergency response
Road maintenance, 9.8 miles of gravel roads
Special events traffic control
Slurry Seals
Storm drain cleaning and repairs
Mr. Faught spoke of the strategies of pavement management. If the road falls under reconstruct it is very expensive to repair so they have taken the approach to focus on the overlays and street slurry’s to expand the pavement life. There is still a concern of the Street Fund.
Mr. Faught spoke to some of the accomplishments of the Water department:
Algae control and Moss removal
Water treatment, 900 million gallons of raw water treated each year
Distribution, responded to 415 customer calls, responsible for 4 reservoirs, districts/systems repairs, 130 miles of water lines out there to repair, new construction installation and repairs, hydrant maintenance and water sampling/telemetry.
Discussion was held regarding the current hydrants in use. It is a budgetary item that needs to be reevaluated. Streets utility worker, Steve Burkhalter explained that there is a plan in place over the next year to evaluate all the hydrants and begin replacing if need be. According to him, he feels all of the hydrants in use are currently working.
Discussion was held regarding the charges for services projection and that it does not take into account the projected rate increase and it was determined that it needs to be increased according to the master plan.
Mr. Faught noted that this year’s budgeted intergovernmental revenue wasn’t used in full and it is being rolled forward.
Mr. Faught spoke to some of the accomplishments of the Wastewater department:
New construction
CCTV Inspection (root intrusion)
System Inspection (smoke testing)
System maintenance Jet rodding
90 miles of sewer were cleaned
Damaged line replacement
System repairs
Discussion was held regarding Ashland creek being above the temperature limit 89% of the time. The water coming out of the wastewater site is currently being addressed with projects. The goal is zero percent. Part of that higher percentage could be in part due to a new tracking system.
DEQ will give us about 5 years from when the new permit is issued to construct and fix the problem before any penalties are assessed.
Discussion was held regarding the future projections in 2018 which shows an ending fund balance equal to 5 times what it should be. This is because the projections do not include the large CIP projects identified in the master plan.
Discussion was held regarding the equipment fund. It was noted that the summary chart shows the expenditures are increasing 56% this year and is due to the equipment needing to be replaced. The equipment gets replaced as needed and it fluctuates. The biggest expense this year is a new fire truck which costs approximately 525K; the current fire truck is 21 years old.
Mr. Morrison noted that all buildings that house employees would be targeted in the energy audit. At this point there is no funds budgeted to correct anything found in the audit; it is just to gather a list of recommendations and proceed from there.
Mr. Flurry spoke to the Airport fund and the budget for 50K for zoning. They are looking at having a consultant come in and look at the Airport Zoning Ordinance Overlay. Airport improvements projects are 95% grant eligible once approved by the FAA. The airport fund itself cannot support large projects so they are put in the equipment fund.
Discussion was held regarding the ending fund balances being high. Mr. Kanner pointed out that we need our ending fund balances to maintain our credit rating. We have an AA3 rating. He also noted that they are looking at lowering the general fund balance by 700K next year due to the discomfort by the budget committee. Ms. Stebbins expressed discomfort with the way our reserve fund is set up. Further discussion was held regarding the reserve fund which lacks creation by the council. Mr. Tuneberg pointed out that council has established that fund and the fund was budgeted. However they chose not to identify a dedicated revenue stream. If there was an ongoing/dedicated revenue stream then the auditors would look at it differently and it would be reported differently in the financial report. Because they are “windfalls” those funds cannot be categorized properly. It is managed on a budgetary basis.
Mr. Tuneberg explained the intent of the biennial budget is on the off year of the biennial budget they would be able to look at longer term impacts etc.
Some of the committee members would like to see a high level overview of the reserve funds, contingency funds, ending fund balances, updated revenue estimates. Mr. Tuneberg stated he could distribute those revenue estimates or he is willing to have a group or individual discussion.
Committee member Gentry/Daehler m/s to have another meeting on 5/7/12 to go over these items. Voice Vote: Motion did not pass.
ADJOURNMENT
The meeting was adjourned at 8:33 p.m.
Respectfully submitted,
Tami De Mille-Campos
Administrative Assistant
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