Agendas and Minutes
Citizens' Budget Committee (View All)
DRAFT Citizens' Budget Committee Meeting #5 Minutes BN 21-23
Agenda
Friday, May 14, 2021
DRAFT BUDGET COMMITTEE MEETING MINUTES
May 14, 2021
Meeting conducted via Zoom
(Meeting recording can be watched here or by going to https://videoplayer.telvue.com/player/w9sPsSE7vna3XTN_39bs1rEXjVWF0kfP/media/641856?fullscreen=false&showtabssearch=true&autostart=true, timestamps are also noted in these minutes)
Chair Shane Hunter called the meeting to order at 3:01 p.m. via online meeting on Zoom
May 14, 2021
Meeting conducted via Zoom
(Meeting recording can be watched here or by going to https://videoplayer.telvue.com/player/w9sPsSE7vna3XTN_39bs1rEXjVWF0kfP/media/641856?fullscreen=false&showtabssearch=true&autostart=true, timestamps are also noted in these minutes)
Chair Shane Hunter called the meeting to order at 3:01 p.m. via online meeting on Zoom
ROLL CALL
Present:
| Mayor Julie Akins (Left Meeting at 5:06 p.m. returned at 5:15 p.m.) | Ellen Alphonso |
| Councilor Paula Hyatt | Jim Bachman |
| Councilor Stephen Jensen (Left Meeting at 5:19 p.m. returned at 5:20 p.m.) |
Shane Hunter |
| Councilor Shaun Moran (Left Meeting at 5:17 p.m. returned at 5:20 p.m.) |
Bob Kaplan |
| Councilor Tonya Graham | Mike Morris |
| Councilor Stefani Seffinger | Saladin Amery |
| Councilor Gina DuQuenne (Arrived at 3:03 p.m., left meeting at 4:26 p.m. retuned via phone, returned to video at 4:54 p.m.) |
David Runkel |
Absent: None
INTRODUCTION (Time Stamp 00:01:58)
Hunter explained to the Committee that a motion had been tabled from the previous meeting that they would be coming back at this meeting. He also explained that per the agenda a list of possible motions previously sent to the committee would be looked at during the meeting. He added that any additions to this could also be discussed. The process he reiterated would include a motion, a second, discussion of the Committee and then a vote of the Committee.
APPROVAL OF MINUTES (Time Stamp 00:02:57)
Runkel/Akins m/s to move approval of the April 27, 2021 meeting minutes as presented. DISCUSSION: None, Voice Vote All in Favor, Motion Approved
PUBLIC FORUM (Time Stamp 00:03:17)
Written Testimony Submitted By (see attached): No discussion from the Committee.
Oral Testimony Given: No Requests for Public Comment were submitted.
Public Hearing opened by Hunter at 3:33 p.m.
PRESENTATION TO THE COMMITTEE ON THE CAPITAL IMPROVEMENT PROGRAM
(Time Stamp 00:04:17)
Melanie Purcell, Finance Director explained that instead of a presentation she thought that a question-and-answer time, where the committee could answer questions would be best. She added that a breakdown of information was sent in advance to the committee (see attached) earlier so that the committee members could present their questions during the meeting.
David Runkel, Committee Member asked first about how projects get on the list and if a formal process exists. Purcell explained that there are several routes for items being added to the list. The first of these she stated was the overall master plans that are developed for each area. The second way items are added are when specific concerns are brought forward. Each of these items are evaluated as to where they fall in the above explained master plan and the structural needs. She gave an example being grant funding for repair at the airport. Runkel further questioned what approval from Council is given for these plans. Purcell responded that these lists are created in an intensive process that involves Council, staff, and the community that take several years to build and that these last close to 20 years with the goal being to update them more frequently. These master plans she added drive the projects listed, with Ashland being fortunate enough to do a six-year plan in addition to the 20-year plan. This six-year plan she went on to say is brought back to Council for approval and added into the budget. Additionally, Purcell, discussed there is thought to some staggering of this so there is more intensive conversation of the Capital Improvement Program prior to the budget. The current plan she added was adopted March 16, 2021 by City Council adding that each individual project comes back through Council during the Request for Proposal Process. This she added includes the scope of work and the award of a contract for any project, which in all means that the project is evaluated at least three different times by Council. Larger projects she commented may see close to 5 or 6 reviews.
Councilor Paula Hyatt asked about the idea of the plan being done differently in the future so it can be reviewed earlier by Council and what this would look like. She commented that there are a lot of elements to the list including regulatory, capacity and deficiencies. Highlighting that deficiencies are wide ranging but looking at these details is important in order to make the best list. Purcell responded that within the Budget message thought was given to intensive topic discussions with Council starting in August and September. The goal she added was to have the Capital Improvement Program ready for review in the fall prior to the budget season, which would create a more seamless process, but strategic master planning is needed for this. Adam Hanks, City Manager Pro Tem added that the Budget Review Ad Hoc that had met after a previous budget cycle had also suggested through their recommended timeline, the target of reviewing the Capital Improvement Plan in the Fall before each budget year. In addition to this he added that rates also need to be reviewed with this plan as well.
Councilor Stefani Seffinger commented that in the planning of the Capital Improvement Program and Master Plans that it is important that different aspects such as those with electrical and streets needs are worked out together. Hanks commented that this was important and that Scott Fleury, Public Works Director has been working to overlay such aspects of the projects. Projects he added can sometimes change in order due to the efficiency that can be found in both costs and time. An example of this he noted was the Hersey Street project.
Councilor Shaun Moran asked why projects that were voted on but not approved still remain on the Capital Improvement Program, specifically referencing the Talent Irrigation District Piping. He also commented that he could not agree more with Hyatt when it came to a proactive approach looking at the pillars of regulatory demand, maintenance, and deficiencies. He further spoke to having these done sooner so that the Council had a better idea of the projects. In his second question he asked about the City Facilities Optimization Fund and his concern with the funding, further questioning where more detail on this could be found. Purcell responded that this is a pre-requisite for other projects and is also looked at as a way to consolidate funds to save in the long run. She further spoke to this needing to be talked about so that a solution could be found and the funds in question could be used for a study. The project she added has two aspects including looking at a plan and general maintenance. Moran responded that made sense and that he was mainly asking because of the cost being close to $1 million. Hanks went back to answer Moran’s first question referring to the ditch project. Hanks explained that this project was not turned down by Council but rather was deferred and will be in the plan until Council wants to remove it. The plan overall is based on the decisions of Council with this project still needing to be discussed and the issues, risks and implications explained he went on to say.
Councilor Stephen Jensen commented that for purposes of this meeting that the Committee would not be able to do too much on the Capital Improvement Program topic and asked that the Committee move forward to other decisions that need to be made.
Hyatt asked given the depth of the list and the resources available, how much of the planned Capital Improvement Program gets executed? Purcell referred to the presentation sent to the Committee, answering that the cost of these projects typically does not run over $10 million, with spikes over the years reflecting the budget years. Projects budgeted began to get scaled down or the cost may get spread over a certain amount of years she added. She also explained that due to state law you may see this amount many times as it has to be appropriated this way. Hanks added that this topic has come up many times in past budgets and looking at the percentage of effectiveness it tends to be out of the hands of the City. Other agencies have different timelines he added. Additionally, changes in Council or Request for Proposal snags can also happen, Hanks explained. Overall, the City does try to track projects as if they were to go on a normal timeline.
Runkel thanked staff and the Committee for this discussion.
COMMITTEE DELIBERATION OF BUDGET
(Time Stamp 00:20:15)
Hunter explained the process and the motion that was approved at the May 11, 2021 meeting. The motion that was currently being discussed had been tabled in the last meeting and was to accept the budget as amended.
Hunter went on to discuss that the first motion was for the marijuana taxes and that this had been approved already.
Purcell suggested addressing the motion that was already on the table. David Lohman, City Attorney explained that under Roberts Rules of Order that the motion that was on the table and postponed at the previous meeting is the first item that should come up under old business, unless there is a vote by two thirds to change the order.
Amery/Akins m/s to move the order to amend the initial motion until the Committee has discussed the other motions prior to voting on the outstanding motion. DISCUSSION: Saladin Amery, Committee Member added that he did understand the protocol on this. Hunter explained that his understanding is that this amended motion came up for the initial motion, that then anyone can motion after this and those motions can be discussed. Purcell confirmed that if they were motioning to amend the motion on the table that this would be correct. Mayor Julie Akins confirmed that there was a motion to amend, and it had been seconded. Lohman in order to understand, asked to confirm that Amery’s motion was to change the order of business so that what would normally come up under old business would be postponed. He added that there was a second for this, his belief was that this was the motion on the table. Amery further asked that he did not know what the best protocol would be to proceed, but that the goal should be to discuss the motions sent to the Committee, before there is a vote on the budget. He added that he is for whatever allows this. Akins also added that she had previously seconded the changing of the order of business, as recommend by Lohman. Amery agreed. Lohman stated that if this is the case then the motion requires a vote of two-thirds of the committee or 10 members of the Committee. Jim Bachman, Committee Vice Chair asked Lohman to instruct the Committee on the possible motions at that point in the meeting prior to Amery’s motion. This he added was because there was an open motion coming into the meeting and it would be helpful to know what the acceptable motions would be. Lohman listed the options as the one discussed previously in the meeting to change the order of business, which require two thirds vote or amendments to be made to Bachman’s motion on the table, which would require a majority vote. Lohman also discussed the possibility of a consideration of the motion to be called as it is not timely to the tabled motion, this he also stated would require two thirds vote. Runkel suggested that the simplest process would be to have Bachman withdraw his motion so that other motions could be considered and that at the appropriate time the Committee could come back to Bachman’s motion. Lohman agreed that this was a possibility. Runkel further spoke to this making things easier and would be under the normal procedures of the Committee to not take up the motion to approve until all things are considered. Akins reminded the Committee that there were two motions on the floor. Bachman noted that as well, adding that Amery’s motion should be clarified as it supersedes his own tabled motion, and he would respond to Runkel. Amery replied that if Bachman was willing to withdraw his motion, he would withdraw his motion as well, with the idea being that if Bachman was not willing to withdraw, they would need to go to a vote. Bachman added that he did not want to negotiate at this point and Amery suggested a vote. Hunter stated that as a point of order he would be calling on Councilor Tonya Graham to speak. Graham stated she was confused, as looking at the agenda she saw the Committee was at the point to accept the City Managers Recommend Budget and that it was her understanding the Committee would be taking up the amendments, for which one had already been done. She added that the list that was sent to the Committee would essentially be possible amendments to the first and tabled motion. Her thought was that the base motion of approving the budget was needed in order to look at these amendments and changes. Graham added that she was not aware of what the structural question was, as she thought that the way to move forward would be to start going down the list of motions sent to the Committee, with the motions being to make an amendment to the previous motion. Her concern is she does not know how it would be done without that base motion of approving the budget, but that she thought the Committee was there in ways of the agenda to begin discussing the motions as long as the understanding is had that everyone is aware that they are amending the motion on the floor. Akins reiterated that there were two motions on the floor, one is to approve the budget as is and the other is to change the order of business, which both need to be addressed. She also explained that changing the order of meeting if voted on and passed by a two-thirds majority would allow for the list of motions sent to the committee to be looked at or that Graham’s suggestion could also be looked at. She then added that the Committee needed to do something with the motions on the table prior to proceeding and that a possibility would be to withdraw that motion of changing the order so amendments could start to be made. Amery withdrew the motion as stated. Akins withdrew her second as stated. MOTION WITHDRAWN.
Akins explained that as the motion had been withdrawn that it now meant that the only motion on the table was to accept the budget as is, which was open for amendments. Both Hunter and Lohman agreed.
Hunter directed the Committee to begin making motions as stated on the list of motions sent by the Committee (see attached). These motions he added would be an amendment to the current motion that was tabled at the last meeting regarding acceptance of the recommended budget.
Akins asked for clarification on where a list of these motions to amend the motion could be found. Hunter and Purcell responded that this was sent that morning to all Committee members. Hunter further added that this was the same email that had the agenda and the property tax motion on it. The email was resent.
Bob Kaplan, Committee Member asked if the motions should be presented in the order that they are on the page or let people speak as they would like.
Purcell asked that the Committee be as precise as possible. Staff she added is not trying to challenge or question the desire of the Committee, they just want to make sure that what is being brought to Council is complete and accurate in the numbers and in the language.
Bachman added that he agreed with Graham that this was a good starting place.
Bachman/Jensen m/s to amend the motion so that the first $100,000 per year of proceeds realized from the sale of surplus asset sales be allocated to the Street Fund. DISCUSSION: Bachman added that this would replace the funds from marijuana taxes. He also stated that he tried to add this in a previous motion but that for the sake of simplicity he was glad he was stopped. Speaking to the $100,000 that was recommend to stay with the housing fund, something needed to be done with the Street Fund as well. Although he went on to say that this is not a reoccurring amount of money it is a substantial amount of money where the first $100,000 could be earmarked for streets with the rest being at the discretion of the Council. Purcell noted that as a point of clarification that the marijuana tax as originally proposed was staying within the General Fund asking if the intention of the motion was that the funds go back to the Street Fund or to the General Fund. Bachman responded that he had been commenting on his motion while saying it and he would restate it for clarification. Jensen speaking to his second stated that almost every day they are hearing about the condition of streets and that he believes that this is a wise shift. He also expressed concern that when there is a sale of these assets a rabbit hole might be gone down and be bifurcated in many different directions, so he liked the idea of setting aside funds for something this is needed. Mike Morris, Committee Member went on to say that he has concerns that some of the properties were bought with funds from other Enterprise Funds. He asked if these funds would then make funds be transferred from other Enterprise Funds to the Street Fund if they were sold or if other safeguards were in place to prevent this from happening. Purcell responded that the only ones that would be eligible for this would be those owned by the General Fund or the Street Fund. She continued by saying that property in Water and Wastewater would not be eligible by law. Hanks added this a bit contrary to the Council approved financial policies, but this can be addressed later and that this may require a Council decision. Hyatt asked for clarification on if this would impact the proposed percentage of fees that is taken from franchise fees in support of Streets. Asking further if this would take those percentages down or if this would be in addition to this. Bachman responded that his idea was that since the marijuana money was taken and put back in the Housing Fund that this money would replace keeping it the same but proposing it with a different source. Hyatt questioned if the marijuana money was originally for Streets or the General Fund. Purcell confirmed that this was just in the General Fund. Graham asked about policies involved because as she recognized it new policies were just passed that had specific elements around what to do with the sale of surplus property. She added that she had a concern that something might have been put forth that goes in direct opposition to a Council Policy. Bachman asked for clarification from Hanks in regard to Council Policy and if this motion was to pass could it be dealt with by Council. Hanks responded that what these types of motions end up being are recommendations to Council as it will require Council to do something but is not as directive as some of the other motions might be. Due to this Bachman made the decision to withdraw his motion. Bachman withdrew the motion as stated. AMEDNMENT WITHDRAWN.
Runkel/Moran m/s to cut the City Managers Recommended General Fund 2021-23 budget by $500,000 as a first step in reducing the City’s long-term structural budget deficit. DISCUSSION: Runkel stated that this should not be controversial as two years ago the Committee, set up a Cost-Cutting Subcommittee, which met a dozen or more times he stated and then presented some proposals for reducing the budget, as well as City spending. He continued by saying that some of these had been implemented, while others are still out for discussion. He stated additionally that Purcell and Hanks had mentioned many times while presenting the budget that there was a structural budget deficit that will continue until the City gets its fiscal house in order. He also added that Council according to Purcell and Hanks would be presented with what needed changes there were in City priorities and policies in order to do this. His motion he went on to say encourages those discussions and as he confessed adds some pressure do this sooner rather than later. Adding that not doing something in his view about the budget would be irresponsible he went on to say that this would also mean that the Committee would be neglecting their role by state law to carefully review City spending and make suggestions for insuring the long-term financial viability of the City. In conclusion he explained that the sooner something is done the less painful the process will be and urged the adoption of this amendment, as this will be the responsibility of the Finance Director or City Manager to carryout. He also added to his conclusion that the City Manager has broad authority to guide Council and put the budget back into shape. Moran added that what Runkel stated was very well articulated and that he is in support of it as there needs to be work done to streamline costs which by giving the responsibility to Hanks needs to look at reducing costs without impacting services. This he cited would mainly be in Fire and Safety in the General Fund. He ended by saying he is very much in support of this motion. Akins asked as a point of clarification if this $500,000 would be in addition to other proposed amendments on the table or if it would be a total $500,000 savings. Runkel responded that he was not aware of the other amendments offered so this would just be his proposal to make sure that expenditures are being cut by the stated amount, with these discussions being made by Council at the recommendations of the City Manager. Following up on Akins’s question Hanks stated that he assumed that all of the amendments are going to be additive as they go and if they are not it’s something that needs to be tracked to see if it will alter. Ellen Alphonso, Committee Member cautioned the committee as she was concerned about the concept of the Committee reducing $500,000 without naming the areas of service for reduction. She added that she feels like this is a balance and just asking for expenditure cuts without specific plans is a hard ask. Councilor Gina DuQuenne agreed that this would be a great decision in making these cuts. Speaking to what was just said she added that she was in agreement that the City Manager and the Finance Director could find places to cut. Hunter clarified to the Committee the intent of the motion was to reduce the fund balance. Runkel responded that it was actually to reduce expenditures within the $38 million General Fund Budget and that he thinks that finding a half of a million-dollar reduction is doable, as Purcell and Hanks have said that it has to be done. He went on to state that he thought that it should be done in this budget. Hanks added clarification on adding to the motion stating that the motion is $500,000 in the General Fund not excluding or including any particular element. Amery questioned if saving $500,000 within the budget was left up to the City and Council to figure out, where would that leave the other motions. This he added gives thought to his listed motion on trying to find savings in reducing salaries so that people are not let go of. He went on to ask if a discussion would be had on broadly how much the Committee would like to see the General Fund savings in or will it be done on a case-by-case basis and added up with additions to each motion. Hunter responded that these would be more of a policy decision and the Committee could come up with ideas to influence what would be a part of the $500,000 unless it is specially stated that there are specific additions to the $500,000, such as asking for another amount to be reduced in another area of the budget. Akins asked for further clarification on the motion, noting that as she sees this it, it is a blanket motion for a $500,000 cut which she understands and appreciates. Any additional motions she further explained would come along as additional cuts. Adding to this thought she stated that with respect that this motion would be better made after the Committee has been able to look at all other proposals and that if all of these are added up the proposed number requested to be cut could be gotten to, as she felt that all the other motions could be talked about. She asked that this motion be delayed so that the other motions could be looked at. Hearing this Runkel stated that he would withdraw his motion. Runkel withdrew the motion as stated. MOTION WITHDRAWN.
Akins thanked Runkel for doing this.
Bachman spoke to the Committee about being careful for the sake of efficiency to distinguish between budget questions and strategic suggestions, as what the committee should be discussing is specific amendments to the motion that he proposed and that they are not talking about the entire list of possible ideas.
Moran asked for more clarification on what Bachman was speaking to. Bachman responded that he was saying that the Committee should keep any discussion of recommendations to the Council for policy discussions during their strategic session in the summer out of the consideration of the motion.
Moran further stated that he would motion for an amendment, saying that one of the dilemmas before the City is to look to find ways to streamline the General Fund. With this said he added that the budget presented outline’s deficits of $15 million through 2026 and close to $20 million with money coming from the Federal Government. He went on to say that the word crisis is thrown around but that these are the same voices that over the last several years have said that the budget is fine, and that the City is fiscally well run. However, he added that a $20 million structural deficit sounds like a fiscal crisis and ways need to be found to make affordability more reasonable with a longer-term vision and we should not be looking to impact essential services.
Asking for a point of order Jensen asked if the discussion of amendment offered by Bachman narrowed the focus. Amendments he further added should be to address the first motion and he did not believe that the current discussion was going in that direction. Moran responded that he was getting there. Hunter then asked Moran if he had a motion that could be moved and then seconded.
Moran/Amery m/s to decrease the funding to the Human Resource Department by 50% in the 2021-23 budget and have the City Manager immediately explore the feasibility of streamline and outsourcing the City of Ashland's Human Resource needs. DISCUSSION: Moran stated that a way needs to be found to make affordability more reasonable in his view and with that being said he believes that the cost for the Human Resource Department is expected over this budget to be $1.1 million, which is up 30% from the 2019-20 actual cost. He went on to explain that this is a sector where in private companies and other communities there is a use of third-party vendors to outsource and if this is not addressed the cost in this department will continue to spiral out of control. He also added that many functions of this department were already outsourced and that organizations like Rogue Valley Council of Governments or League of Oregon Cities should be looked at to explore ways to reduce costs over the course of this two-year budget. Counting his discussion, he noted that he had suggested a 50% reduction, which he thought may be best in the second year after the groundwork had been laid for this strategy. In conclusion he stated that decisions for this would be best for the City Manager and Finance Director, but his hope would be that the Committee could support this concept and approve it. Amery discussing his second reiterated that in the private sector this is done often, with outsourcing being done so that costs are not incurred by the organization. He added that in reading the budget and executive summary there is talk of holding positions and not hiring more, which he thought should not allow for Human Resources to need additional funds over the next two years. Finding ways to cut costs and hire as needed instead of absorbing costs up front makes sense to him; he went on to add. Akins asked for clarification on what the cost savings would be cutting 50%, as she was trying to do the math to get to the $500,000 in Runkle’s amendment. Moran responded that this was $570,550 a year. Purcell added a clarification that only 28% of the Human Resource Department is retained and not reimbursed by other funds, at a cost of about $20,000. Alphonso responded that she is in general support of finding ideas to outsource HR needs, as she added that often in the private sector that great success is seen with this and that some of the systemic budget problems should be solved rather than reducing the individual salaries of people which is a temporary and short-term fix to see how an overall reduction of FTE’s required by the City. She added that she had a concern with her personal work that putting a numerical value of 50% and finding a service that reaches that goal and outsourcing would be something that she would caution against as the expectations. This she cited could cause a lot of liabilities in relation to Human Resources. She continued by saying that the hiring freezes and other parts of Human Resources would incur greater costs to Human Resources, as sometimes what is seen as less in Human Resources equated with less costs are not always the case. She concluded by saying that there is sometimes as standard flat cost for Human Resources that is not dependent on the size of the organization but on the complexity of the work.
Graham stated that it was her understanding that the line item was higher than the 2019-2020 actuals because of upcoming significant contract negotiations with unions, with budgets including extra contracting expenses to hire outside professionals to help with this. She added that her concern with the motion is that there is a 50% cost reduction possible while maintaining, but there is no information saying that this is the case or that the department is running at higher capacity than is what is needed. Her concern she continued also included that if something like this was done and a number was set the City would not be able to meet the service requirements in order to maintain a Human Resources Department for an entity of its size. Kaplan spoke to being along the same lines as Alphonso but that he also had sympathy with the need to find efficiency by outsourcing services that can be done to a better level of quality or a lower cost. Referencing what Councilor Moran was speaking to, he talked to how the Human Resources Department is already outsourcing some of its work and what the scope of work would be for further outsourcing. He then questioned if this would yield the needed savings due to his experience in outsourcing, as he did not think you could outsource all of the tasks and would need to have people managing those outsourced services. Bachman agreed with Alphonso and Kaplan in that the Committee needs to be careful, as with his experience in Human Resources he had a very thin department with an enormous number of tasks that need to be done properly. If not done properly he continued could cost the organization. Outsourcing the Management part is critical and does not go away he stated, with the Risk Management part making him nervous about Human Resources being the first place to look. He then stated that this seems more like a recommendation for the strategic process as it is a percentage and that he would not support the amendment. Bachman speaking to his time on the Cost Review Subcommittee added that much talk including a formal recommendation was given to outsourcing, as this should be a permanent decision to look for efficiencies without losing quality, but he does not think this is within the Human Resources Department. He concluded with his point on this being part of a strategic conversation and that he understood the others urgency to the process of cutting costs suggesting that goal setting and strategic planning needs to be done after being delayed so that planning can be done within a set of goals. Jensen stated that in a City with as many employees as they do, with 250 plus employees, including Police, Fire, Parks, and others, to hit the Human Resources Department this hard with this type of a cut is not a good idea and ill advised. Seffinger added that if the main push from the majority of the Budget Committee is reducing $500,000, she would contend looking at what percentage would be to each department as another way of looking at this. She added that she was not comfortable throwing out ideas without know the consequences of those, suggesting the Cost Review Committee had also looked at ideas like the ambulance service. She went on to say that there are a lot of other things that are not on this list of possibilities for cutting, adding that there is also an idea of looking to grants for more revenue if certain things are not cut because of matching funds. She also added that she liked the idea of Runkle’s amendment and not looking to specify which things the Committee is looking to cut. Amery stated that listening to where the discussion was going, he agreed with what Seffinger had said adding that this is how it is done in the private sector. He also spoke to agreement in Alphonso’s statements regarding short term cuts and planning for the future where real change will be seen and the City will not find itself in a deeper hole. He continued by saying that he thought that what was usually done was having the Manager of a division be told that they will be cut by a certain amount and then they have to make an evaluation on how they operate and where best to make cuts in order to make a proposal. He added that he understood where Moran and Runkel were coming from, with his idea being to save between $1 million and $1.5 million that did not require firing but as he is in the private sector, he himself has had to take cuts in the past year. Amery added that he is probably not the only citizen that has done so and that cutting salaries for staff is a tough decision to make but ways need to be found to make savings. The Budget Committee he explained makes these suggestions and Council works with the City to implement them, so it may be better for the Committee to come up with a savings number as everyone is trying to get to the same place. Without doing this Amery added would allow for excuses to be made on why the Committee shouldn’t approve any of these motions and they would then be back to achieving nothing. Morris commented if Human Resources is being proposed to be cut it would seem to him that Council just added a new commission with much of the work being done as he reads it through Human Resources. He continued that it goes back on trying to cut funds but on the other hand Council is trying to do something different with the funds they have, and he does not see how funds can be stipulated like this by the Budget Committee without knowing Council’s intentions for the future. Morris stated that because of this he could not support this motion either, further explaining that this is a lean department with not much overhead to cut. Bachman agreed with Amery and Seffinger explaining that if the Committee is going to look into current budget cuts, which is not what he stated within the original motion but would not be averse to, he went on to explain that he thought the approach would be a general one of relying on the professionalism and expertise of the staff. Staff he added did not need to be micromanaged so he would not support this amendment but thought it may be time to call the question so other ideas could be considered. Roll Call Vote: Moran, DuQuenne, Amery, Runkel and Akins, YES. Hyatt, Jensen, Graham, Seffinger, Bachman, Hunter, Kaplan, Morris, Alphonso, NO. Amendment fails 4-9
Hyatt stated that she thought that at the core of this is to look at where the City can outsource jobs independent of department.
Hyatt/Alphonso m/s to recommend to Council to work with staff to analyze what is viable to outsource and what to bring back for discussion. DISCUSSION: Hyatt began by stating that she agrees with what Moran was trying to do and that she does not disagree with it, also hearing the feedback of the body she wanted to understand the consequences with what is on the other side. She continued that she thought both could be done, as an analysis is vital but that she did not know what it would yield. Hyatt added that she was curious and thought it was worth the time to do this kind of analysis, adding that she wanted to state that Administration and staff have been doing this work within the context of this budget, but a thorough review is needed. Alphonso stated that her second was predicated on the comments in a previous email that she had sent. She explained that a lien City force that limits the number of services that they are providing back to the City is important to the Citizens. Her underlying idea she explained is to reduce the number of FTEs to a number of highly qualified and appropriately compensated staff, adding that she is a strong believer in compensating people appropriately and that she did not think that short term pay cuts were the right choice.
Seffinger also suggested that outsourcing needed to be looked at in the sense of regionalization with an example being what has happened with the Police Department and the City of Talent. She added that knowing this revenue is also needed and that looking at this is also important. There are quite a few recommendations of ways she added that the City could regionalize such as shared Fire and Police and equipment. She added this would be something major she would want to look at. She ended by saying that she agreed with the motion. Moran began by saying that he agreed with the idea of outsourcing not only Police and Fire but also infrastructure such as Wastewater, as he has been advocating for it. Moran added that he thought that this motion had already been made by the Cost Review Committee with it having some very specific tasks that they had Staff do, including directing Staff to provide definitive ways to streamline operations with the goal of creating meaningful cost benefits and create a series of services offered that also creates efficiency and reduces costs. With another goal being to consider outsourcing to reduce costs, he added that the expectation was that staff would look at various departments. Moran went on to add that therefore he brought up Human Resources as he agrees that the City should be paying the highest possible salaries to the most talented people that the City has. He spoke that he tried to put the framework in place for year one so that in year two something happened. He also discussed the idea of looking at synergies and streamlining, but he feels like they have already talked about it. He felt that the Committee is at the point where the discussion has been had and they should be looking at outcomes as Purcell had stated previously, which is where he is trying to get the Committee in regards to the General Fund. Runkel commented that in testimony from the Parks Department that not only was outsourcing saving money it was also improving services and he agrees with the motion but wishes that it had a dollar amount attached with it. Kaplan commented that he was in line with previous speakers and that the first step in outsourcing is to define what service level the City really needs, so the Council needs to decide on what the service level is. He also added that a look at the most cost-efficient way to do this is also needed, but overall a service level definition is needed in the process of exploring outsourcing and shared services with other jurisdictions. Amery stated that he was supportive of what Hyatt was saying, as well as other comments but that he did have a concern that the Committee needs to get in the weeds and find savings. He continued that either a number needs to be come up with that would require Council and the City to achieve cuts to that number or the Committee is going to end up going through all suggested motions and not attaching a dollar sign while never getting anything approved. He added to Alphonso’s point you always want to pay your best staff, knowing this he stated you need to come up with a way to cut salaries by 5%-10% to achieve a number across the board so people are not being fired. The Committee he added needs to come to a certain amount of money they want to save, with the City working with Council to achieve this amount. In listening to the current dialog, he explained he was concerned that the Committee will end up two hours from now not actually having approved anything, after talking about ways to cut but not actually getting it done as the Budget Committee is there to give direction. The target he concluded was to see Council and the City work together to achieve this direction. Graham spoke to the Committee adding that this process is well underway, with Council approving two contracts in its last meeting for outsourcing in the City’s tax collection which also allowed for the offset of employee FTE. She added talks of regionalization are also being had, adding that she liked this because it looked at the efficiency of maintaining services. Graham also stated that she was cautious because she knows staff has already been doing this and that some of the things that have been done are not seen yet but what she does know from conversations is that Council needs to come to some decisions around how to address the structural elements. She went on to say that she did not believe that these would all be outsourcing solutions and that some of them will be reducing service levels. Graham questioned staff about the needed shift from year one to year two to make strategic changes that will set the City on a more resilient path. She added that this would be a number that the Council if they were able to get to would help the City to be on a path to greater sustainability and that this number would also allow for the Committee to get to a motion within this meeting. This motion she cited would not be as specific about the how and where but would be more specific about the amount. Hanks responded that this may be more than just a number, as he does not want it seen that Staff are asking the Budget Committee or Council to make cuts or find savings in this biennium. The tool set he explained also includes revenue and that if Council is going to make cuts there are also needs to be a discussion about the changes in service levels as to what is essential. Furthermore, he added that it comes down to cutting services to make cuts or finding revenues for items that you want to maintain, adding to Kaplans point and stating the regionalization has a variety of potentials. Regionalization also he added takes calibration and other parties to be ready and it can’t be forced. There is not a magic cut number he went on to say and that because its more than cuts there is a policy, as well as being part of a strategic plan. Akins/Bachman m/s a call of the question. DISCUSSION: None Roll Call Vote: Bachman, Alphonso, Hyatt, Runkel, Kaplan, Jensen, Graham, Hunter, Akins, Morris, Seffinger, Amery, Moran, DueQuenne, YES. None, NO. MOTIONED PASSES UNANIMOUSLY 14-0
Voice Vote on Amendment: Alphonso, Hyatt, Runkel, Kaplan, Jensen, Graham, Hunter, Akins, Morris, Seffinger, Amery, Moran, DueQuenne, YES. Bachman, NO. Amendment passes 13-1, MOTION PASSES
Amery/Runkel m/s to recommend holding funding in the Ashland Fiber Network and telecommunications fund at 2019-2020 actual levels as outline in the 2021-23 budget, until a study has been made and Council has decided on a future policy going forward. DISCUSSION: Amery spoke to the motion stating that this was discussed at a previous meeting and if there is uncertainty about what the want is for Ashland Fiber Network then the Committee needs to look at option as there is no point in allocating funds to it until Council has decided on a strategy. He added that he looked into Ashland Fiber Network in 2017 and he feels as if it is back in the same place where the Committee was, as it only touches 35% of the City, the City is paying a lot of money for it and there is an expiration date on it. He also explained that as much money as is thrown at it, it will never be competitive but as it is a policy decision Council should do a dive on it as Hyatt had said she wanted to do previously. Amery also added that this needs to be done prior to allocating funds, as the approach to selling would be different from any other plan. Runkel added that this makes sense to him as Council can always adjust the budget down the line if they chose to. Hyatt stated that this is really something that she wants to look into but that she will need a refresh on her memory as she explained that her thought was that the amendment included holding funds at actual levels and this element would provide some other elements that needed to be considered. Hanks responded that these would include implications within leaving the allocation flat, ongoing equipment purchases that are required to maintain the system and keeping the customer/revenue base. He further added that this would be the challenge of the flat part of the motion, but as Runkel has said this is something that could go to Council throughout the process. He went on to state there are expenses that they cannot take down to the 2019 rates do to supplies such as equipment and people that do not cost the same which is a significant operational impairment. Hyatt thanked Hanks for clarification. Morris stated that he could not support this motion, explaining that it seemed similar to the last motion on outsourcing and that cutting funding would actually not leave Council with much of a choice. Bachman stated that he wanted to take the opposite approach and thought that they shouldn’t flatten the funding until a strategic choice had been made, also agreeing with Morris that it was another form of outsourcing as the same types of IT will be needed from someone else other than Ashland Fiber Network. He also added that he voted against Hyatt’s motion because he did not think it was a budget question and had no dollars attached to it, which he did not know how it would fit into the recommendation as Council could do this with or without the Budget Committee adding it. He continued by saying that the Committee had two statutory requirements: To approve a balanced budget and approve a tax rate. Knowing this Bachman told the Committee that they needed to hold the policy discussion and any recommendations that will be made for the strategic plan until after those two requirements have been accomplished. He concluded by noting the time that the Committee had left and the job that they needed to get done, giving kudos to Moran for stating that much of what has been discussed had already been talked about. Moran stated that he would like to echo what Amery had stated as he did not think that his motion stated anything about reducing costs but rather had stated to keep it at 2019 actual levels as outlined in the budget, so he would not be suggesting that this Committee decides to cut costs. Moran also explained that the truth of the matter was that this business has never made a profit and with its latency technology it will struggle to do this. The increase he added for personnel is nearly 19% for the actual 2019-20 budget and increases in total expenditures over the next two years would be $600,000 to $800,000 in a business that has never made any money. Although he added he is not suggesting abandoning or divesting Ashland Fiber Network, he believes Council needs an opportunity to review it and the prudent approach may be to not throw any more resources until it is understood if it is salvageable and what kind of challenges it as a business faces. With this he added he would support Amery’s motion because it mandates that Council moves forward but it controls the cost structure, as there is a $15 million deficit in the next four years, and it is a crisis for which a way to manage the cost structure needs to be figured out. Keeping Ashland Fiber Network at the 2019-20 levels is a small step toward this he concluded. Amery wanted to clarify with the group that he was not speaking to actual cuts, but that he was talking about keeping funding steady and his reason for doing is this is because in 2017 when he sat on the Budget Committee, Ashland Fiber Network came up. In these meetings, he continued, a Councilor took up the charge to put a special group together to look at Ashland Fiber Network and come back to Council. When he stated that he asked about the findings in the first meeting of the Committee, Hanks had stated that he did not recall that this had been done and he thought that his never got done because it was never a proper motion, so the idea behind this motion is to have it in writing and voted on. He additionally spoke that he was not here to dictate policy but if new funding is projected into Ashland Fiber Network for the future, as is spoken about in the next two years, it needs to be done appropriately so that it is understood as to what the options are before it is done, knowing that this is a Council decision. Purcell asked to clarify the motion asking if the proposal was to reduce the recommended budget to the 2019-20 levels within the Ashland Fiber Network or Telecommunications Fund. This she added is 100% housed within its own enterprise fund. Amery agreed that was correct. Kaplan further expanded on Purcell’s question, stating that in looking at the Telecommunications Fund its actually one of the enterprise funds that is increasing its ending fund balance in both years. Revenues he added exceed expenses in each one of the two years and the ending funding balance projected at the end of 2023 is four times the policy requirement, adding that as this was a complicated fund, he didn’t know which part of this was for Ashland Fiber Network and what was for other IT services. He asked for clarification on this and the need to actually do this. Purcell responded that the Fund as presented is strictly the Ashland Fiber Network operations and the City’s internal information services is within the General Fund and would have no impact on the General Fund operations within this context. She added more by stating that part of the recommendation of the City Manager is to do an intensive review including looking at funds and how to unravel the two, so the decision can be clear by Council to make. Kaplan responded to Purcell by asking if his understanding was clear that the Telecommunications Fund ending fund balance is all Ashland Fiber Network related. Purcell responded yes. Bachman asked Hanks, as the motion is to keep the budget flat with the last biennium, which is only a small cut due to inflation, could Ashland Fiber Network continue to operate without a noticeable deficit in services if it was not funding at the requested level. Hanks responded that this depends, with thought given to what could break he could not answer it cleanly as effectively it is a cut as everything done in this operation costs more than it does in the current time frame. Hanks added that they are not immune from market forces of fiber and labor cost, which are all up. Bachman responded that he would oppose this one. Akins stated that she would call the question if needed, as it would be nice to vote on these things but would not specifically do it at this time as it was her hope that the Committee could vote on this and move on. Roll Call Vote: Akins, Amery, DueQuenne, Moran, Runkel, YES. Hunter, Kaplan, Alphonso, Graham, Hyatt, Bachman, Morris, Seffinger, Jensen, NO. Amendment fails 5-9
Hunter put the committee into a break at 4:42 p.m. (Time Stamp 01:42:04)
Hunter brought the meeting back at 4:50 p.m. (Time Stamp 01:50:18)
Purcell explained to the Committee the meeting timeline, adding that this was the only available time that the Committee had to meet the noticing deadlines for both Committee and Council, without Council adding extra meetings. Any of these meetings she added would go into this timeline and this was about the same timeline as prior processes, but the Council meetings are earlier. Video feed will also be lost at 6:00 p.m. which means the meeting needs to stop she explained.
Moran suggested to the Committee, that those who have not made any motions step forward and make them, so that those that already have can make additional ones, he stated that this would help move the process forward.
Graham asked if the Committee could take a step at this point regarding addressing the shortfall in the General Fund. As she explained the purpose of the budget as laid out by staff is not to make drastic cuts in the first year of the biennium so that strategic action could be taken to either adjust services, do them differently, or find other revenue streams to adjust the budget in year two. Purcell agreed that this was correct. She went on to say that what she thought the Committee was struggling with is, as she is struggling with, is the order of magnitude of the issue of what Council is going to need to address and if there is a way potentially for this Budget Committee to pass this budget with an amendment. Council she went on to say will find the answers to a certain amount of money in the General Fund, but she did not know what that number would be. Graham then explained that looking at somewhere within the FY22 space is when the City will begin to drop into a negative space in the General Fund or basically when the City has stopped using funds from the Federal Government. Adding that what she could not tell is what the appropriate number is for Council to be aiming at in terms of the solutions it creates between year one and two. Purcell responded that in previous documents she had spelled out the actual numbers, starting at $2 million to $2.5 million going up to $3 million and then end up around $4 million in the fourth year or 2025. She also explained that as Alphonso had stated that there are differences between making cuts and making structural adjustments to service levels and this is the challenge for Council as staff is not supposed to and should not make those decisions for Council which is in direct violation of policy. This means that Council needs to say what the new policy direction is she stated adding that this is what is essentially needed but that the Federal funding has given Council a year to figure this out. Purcell also explained that the City is looking at a structurally growing compounding issue that starts around at about $2.5 million and grows from there, which is about the size of the organization, revenues in contrast with those expenditures and what the expenditure drivers are. Akins asked if what is being said is that Council dictates policy. She then explained it be within the purview of the Committee to direct staff to bring back recommendations for year two of the budget so that revenue could be cut on $2.5 million by half and then define revenue streams coming in by the other half or another decided upon. Purcell responded that this would be a policy decision that would direct Staff and that what they would do would be to come back to Council and say what the service impacts would be based on professionally recommend industry expertise. Staff would then come back and say that they could recommend a certain level and that to some degree that is what this budget represents is that staff has already taken it as low as they felt comfortable, while recognizing that once they go into another area that they go deeper. There must be an affirmation that Council is ready to deal with this and that if it all wanted to be done by cuts, everything from Fire, Police, Community Development, and Parks would be on the table, which is contrary to Council direction, she explained. She added that if they wanted all out cuts, Staff would have to come back and tell them what this organization would have to look like while also having to come back stating what the policy implications of doing that are and Council would let them know yes or no. Akins then asked if there has to be direction given as there is a deficit in year two. Purcell responded that the recommendation is that the City can get through the entire biennium but starting in year three there is a problem which means building the 2023-25 Biennial Budget would be virtually impossible without policy direction of Council. Graham noted that this seemed as if the Committee was still at the crux of creating more of a sense of a target for the Council, as she was hearing that the Committee wanted to aim at a particular target, whether this be in a particular place or in a particular way. She stated that she did not know what the right way to say what her motion would be, as the recommend budget already includes this process of strategic planning and making strategic organizational decisions but it feels like this Committee is not satisfied that that’s not a specific enough element of the budget, so she will keep thinking.
Runkel stated that he thought that the $500,000 that he had proposed to be looked at was a modest beginning to what needs to be done. His feeling he continued was that as Purcell had said that the cuts get harder and more painful to everyone in the City if this is not started right away. He added that a half of a million dollars is not a large amount on the percentage basis of the budget that is pending before the Committee and that he would be in favor of a greater number, but he thought his number was modest and doable. The City Manager and Finance Director he explained should be able to come up with this. Akins asked if this was a motion, to which Runkel responded that was his original motion that he held off on. Akins apologized for asking him to hold off on this as she thought the Committee would get there in a different way.
Amery commented that he agreed with Graham and Runkel in the sense that the purpose of the Budget Committee is to review the budget and give direction to Council and have them go ahead and do it. He added that this was a tough number, with the number being supposedly $2 million and $4.3 million being adsorbed with the Federal Government money over the next two years. The City he continued will be at a negative $2 million in the next two years and within three years it will be $3.5 million, with it then being $4 million in 4 years with it growing. It has to start somewhere he explained adding that he agrees with Alphonso in principle that you cannot make short term cuts, it has to start somewhere. Specific cuts can be haggled on he clarified, but not everyone will agree on whether it is a salary cut or holding off on expenditures and that he thought it would be more prudent to go Runkel’s route of coming to a number that everyone is comfortable with. His thought with the deficiency being so large even with the extra Federal Funds, was that he does not know if $500,000 is the number, as it has to be something that the City and Council needs to work on in the next two years while keeping in mind that any additional policies that are put in place support the philosophy that the City needs to be back on track. His number he stated would be $1 million to 1.5 million, but he would open it up to dialogue with the Committee, so that instead of motions there is a number that Council can work with.
Seffinger stated that she would like to second Runkle’s motion. Hunter clarified that there was technically no motion or amendment on the floor right now.
DuQuenne commented that she thought the Committee was back to where they started with Runkle’s motion. She suggested that Runkel make that motion again, as she agrees with it whether it be for this amount or another amount. She also agreed with the comment that the best people to make these cuts would be the Finance Director and the City Manager. As in her experience she explained this is usually given to Department Heads, who are given a number and then they come back with what is needed.
Akins also added that she agreed with DuQuenne and Runkel that the motion is to be made. She also added that she wanted to be clear that if this done that it’s $500,000 and by the end of biennium it would be $2.5 million, which she stated would be kicking the can down the road to some degree. DuQuenne responded that she thought another dollar amount should be agreed upon, as she thought it should be higher.
Seffinger/Runkel m/s to a motion on the table and cut the City Mangers Recommended General Fund 2021-23 budget by $500,000 as a first step in reducing the City’s long-term structural budget deficit and that City Council will look for ways to both raise revenue or reduce cost by $500,000 as directed by the Budget Committee DISCUSSION: Seffinger commented that the Committee needs a place to start as Council has been given a very direct message of both looking at revenue, reductions, and what is needed to create reductions by the second year. As a Council member she feels like this has been mandated to her and that she will do this by looking at what needs to be done to be fiscally responsible. She added that there needs to be time to do this as she would like to know what the Community wants. Some of these decisions seem easy she commented, like those of the Ambulance, but they may involve slower response times so all things need to be looked at in terms of what the effect would be to the safety of the City. Bachman clarified that this would be $500,000 for the entire biennium. Runkel responded that this would be for the biennium. Bachman responded that he would be inclined to support this. Alphonso asked Purcell and Hanks if as the motion is written it would give them the ability to make recommendations about service cuts so that the Committee is not just talking about cuts in a vacuum. She added again that you cannot make cuts without lowering the service being provided and if it needs to be amended to allow for certain ideas for service reductions to institute these cuts. Purcell responded that the magnitude of the cut will require staff to go to Council an ask for their direction or clarification that the cuts that they come up with are agreed upon but given that it is over the entire biennium the conversation may begin in early August as opposed to waiting until September. As written however staff is required to come back to Council for direction and Council wholly reserves the responsibility so the Committee cannot dictate any feedback, but she thought that Council members would welcome comments. Alphonso responded that she was making sure that the motion allows staff to give feedback about certain cuts to services the City might provide, she would be in support of this proposal but would caution that service cuts need to be looked at to the Citizens. Adding to this she stated that as a Citizen herself she knows that the systemic issue cannot be solved without going from the other side of the services that the City is providing. Kaplan added that he is in the same line of thinking and that he had thought that the City Managers Recommend budget reflects what staff felt they could do within the policies that they have, including those enacted by Council. He asked if $500,000 would be enough or if more is needed to recommend service level adjustments to get the City on track. He also discussed if this could be a starting point, with the possibility of an optioned list, as Council will ultimately decide what service level to provide to the Citizens of Ashland. Purcell responded that she would consider the amount the bare minimum, as the Council will be asked to deal with this no matter what, what is happening is that the Council is simply being provided with an explicit expectation that is done now. To adopt the budget, she commented Council would actually have to specify where the funds come from and if it is not adopted as such and they do not do this, which is within their authority the expectation still remains that there is a lot of work to do over the next 12 months. Hanks agreed with this, adding that the Committee is getting into the scale where these become the numbers that they must talk in. One way that this can be done he added is when the Ambulance Study is brought forward in June, with these easily being the type of swings they are talking about in terms of revenue, service levels, regionalization, and outsourcing. These are the kind of numbers that staff is planning for and expecting to bring back and they are not arguing, debating, or frustrated at all by the tone and tenor of the Committee, but how this is communicated is up to the Committee. Moran explained that he was in shock, as half a million dollars in proposed cuts in a $347 million budget is less than a quarter of a precent. He continued that he thought it was too bad that the Committee did not take to heart Purcell’s claims and warnings as he had done for which he is fearful that this motion is not substantive enough to make any impact. This he commented was the same path that the Budget Committee followed over the last two budgets and nothing has happened. So, he will not support it as it is nowhere near substantive enough and time will tell that it isn’t. With all due respect he ended by saying that he will not support the motion. Runkel added to the discussion by reminding the Committee that the Parks department found a way to eliminate 3 FTE’s while contracting out business and improving services, so service cuts don’t necessarily translate into service reductions and it makes it into a better way of doing it. Graham added that she thought it was important to remember that the shortfall is in the General Fund which is a much smaller amount than the overall budget. This means she added that any changes to it have a bigger impact. She commented based on what Purcell had stated and when she looked at the motion and process that $500,000 of savings that may have been found. Based on this she stated that Council would have to immediately identify where that comes from in the General Fund, which means that a decision would have to be made without the strategic conversation necessary to make it well. This she explained is exactly the whole point of setting up the structure this way, to give Council time to structure shifts. If in the middle of June, Council must figure out a way without any real information of what those service levels would be with a $500,000 change this would move in the opposite direction of giving Council time to work with the Community to figure out what the right step forward is. She concluded by saying that she was not concerned about the number but now she is concerned about the idea of Council in the space of one meeting having to figure out where these cuts happen and the areas that they would have to pick between. Hunter confirmed with Purcell that this would need to be immediate as in the adoption resolution it would have to specify where those cuts would come from and have a broken-down resolution that Council adopts. Hanks added that if Council was going to implement the recommendation of the Committee this would have to be done. Amery asked to understand the process if the motion is to advise Council over the next two years to find cuts whatever the number is, as he agrees with the point of others, $500,000 is not going to fix anything as Purcell has stated, would the motion being to give a number to Council to work with the City to find the cuts necessary then be the motion that they have two years to do it? Purcell responded that the motion on the table as she understands it specifically cuts the budget. Amery suggested changing the wording of the motion to reflect over the next two years. Amery continued by saying the Committee was arguing about the wording of the motion and it should be changed to not waste time. Seffinger stated that she would be amending the motion. DuQuenne added that she too was in agreement for Seffinger being willing to amend the motion and agreed with Amery. She also asked if Seffinger would be willing to raise the dollar amount to at least $1 million, because $500,000 is not enough. Seffinger/Alphonso m/s to amend the motion to say that over the next two-year period the City Council will look for ways to both raise revenue and reduce cost by $500,000 as directed by the budget committee. DISCUSSION: Seffinger explained that it is known that there are deeper cuts that need to be made and as Graham has said there will be two years to look at the best way to do this. She added that she knows that $500,000 is just a very small starting point but that she anticipates that there is a Council right now that is looking at the budget and wants to find ways to make our City financially stable adding that there is also a level of trust with this. Alphonso added that she appreciated the fact that over the next day or weekend that Council could not figure out a way to thoughtfully go through every department. She added that the only amended she would have been to increase the amount from $500,000 to $1 million over the next two years. Akins commented that they all agreed and with the $2.5 million hold over the biennium that $500,000 will not do it, but they can continue to up that number to get closer to a different number as the biennium wraps up. She further explained that the amendment to the motion asked for ways to cut and also to increase revenue, but that there are virtually no ways to increase revenue that she has heard of adding that she had previously brought forward ideas outside of raising fees to residents of Ashland as it is the revenue stream of the City. Bachman asked Purcell if the $500,000 could be specified in the second year of the biennium so that there was more planning time to implement a structural change. Purcell responded that this could be specified this way. Bachman further clarified if this would then take the time pressure off as was being discussed. He added that he understood the legal requirements but questioned if the adoption message for Council would be relieved of the timeline or if it could be more general. Purcell responded that she would try to find a more general language that Council could use to direct that activity. Bachman stated that he agreed with the general ideas but that there are two periods to look at the budget period and the strategic period which goes 2023-2031. For the Budget period which he noted is where the implementation needs to take place and $500,000 needs to be saved but that he was not talking about the general direction which is the call of Council. The question he commented was if the legal language in the adoption resolution was specific that this cut would happen in the second half of the biennium. Bachman then explained that the language would include wording that in the first year the biennium would stay the same but that $500,000 would be cut out of the second year. Lohman and
Purcell agreed that yes this could be the wording. Purcell further responded that with the recommendation as opposed to the specificity of where the dollars come from the Committee, there could be a way to make the language specifically recommended to Council to adopted and come to a similar result. Bachman then asked if specific fiscal years could be talked about to which Purcell stated yes, but that by law they have to be adopted as a single unit. Bachman suggested that an amendment reflecting this be stated and asked Graham if this would address her concerns. Graham replied that as long as Council does not have to identify where cuts would come from in the next month then it would satisfy her concerns. Bachman asked if the amendment could be amended. Morris stated that knowing that they are supposed to adopt a motion but not really adopt a motion as it will be adjusted in the second year that he would walk away not thinking he had done his job because they had not done what they were supposed to do. He added that the Committee could not get involved in policy as this was the Council’s role but for the Committee to just say that it wants $500,000 less doesn’t make sense to him because with the budget, they will either adopt the one they have, or they say what will be different in it. As he sees it, the Committee will be adopting the budget as is with the second year being $500,000 less and he did not know if that would meet the legal requirements. Hunter replied that these comments are not specific to the specific amendment that is being discussed to change Seffinger’s motion. Morris asked for more clarification on what the motion was to which Hunter responded that the current motion was to amend the previous motion of Seffinger’s to allow Council to have more time for the $500,000 cut. Bachman responded that was his motion that had not been stated. The motion was read back as a motion to recommend that Council look at ways over the next two-year period to cut funding and look at ways to increase revenue. Also added was that this would be by $500,000 as stated in the original motion. Kaplan said that his question speaks both to the motion and the amendment and because he had listened to Moran talk about why he is opposed to a $500,000 cut to a $350 million budget, asked for clarification on if this was a cut to the General Fund at only $80 million which he believed was nowhere near $350 million dollars. He asked to make sure he was not confused. Purcell stated that this would be a $500,000 cut to the General Fund which is around $72 million to $73 million. Akins asked about a clarification stating that her understanding was that it was not phrased as merely a cut, as she was confused about what was a motion or amendment, but that the amendment was also around a $500,000 cut and or seeking revenue streams. Kaplan apologized saying that his question regarding cuts may have caused some confusion. Seffinger talked about ways that revenue could possibly be raised, and this is a part of a process of getting the budget in balance including looking at the regionalization of some things with the possibility of many other things that could raise revenue. She added that she did not want to take this out of what the Committee was trying to do as she also gave thought to property taxes going up. Lohman clarified that the motion was to raise revenues and reduce costs by $500,000. Amery suggested making another amendment to Seffinger’s motion. He added that Purcell had clearly stated that although they were in a balanced budget for the next two years, the City had absorbed the $4.3 million that the government had given the City and they would then be at a balance of a $3.5 million deficit in year three. This he added means that the City is actually at a loss of $7.8 million over the next three year and due to the time left in the meeting the Committee should decide on what this number would be. He suggested rewording it, having everyone vote on it, so that Council can work with the City at a specified time, because if it says with the next two years the City and Council can decided when the time is appropriate. He added that this needs to be done so time does not run out before anything has been voted on. Hunter clarified that the motion needs to be voted on to allow time for the motion to be spread-out. Akins requested that the amendment and motion be read back, so the context of voting could be understood. The motion as whole was read back, and then as a separate amendment stating that to recommend that Council look at ways over the next two-year period to raise revenue and reduce costs. Voice Vote on Amendment: Alphonso, Hyatt, Runkel, Kaplan, Jensen, Graham, Hunter, Morris, Seffinger, Amery, Bachman, YES. Akins, Moran, DueQuenne, NO. Amendment passes 11-3, MOTION AMENDED
Hunter stated that the motion that was now on the table was as read earlier as a motion to recommend that Council over the next two-year period look at ways to raise revenues and reduce costs by $500,000 as a first step in reducing the City’s long term structural deficit. Amery suggested before the motion was put to a vote that he would like to suggest increasing the amount to $1 million.
Seffinger/Alphonso m/s to amend the motion to change amount from $500,000 to $1,000,000. DISCUSSION: Amery commented that as he had said Purcell had clearly told the Committee that although they were balanced at the end of two years cuts have to be found and if they don’t, the City will be in a very different position. $500,000 he stated was a nice first step, the City has two years to come up with these cuts, so no one is under any pressure to reduce these amounts. He continued that what Councilor Seffinger had stated about finding further cuts would put the City in year three in a stronger position. He added that he had thought of a higher number but thought that $1 million is a very safe number that everyone can work towards in the next two years. Alphonso stated that she had nothing to add. Moran thanking Kaplan for his correction on where funds would need to be reduced, asked if the motion then states that $1 million would come from cuts or revenue increases. Hunter confirmed that this was how the motion was stated. Moran responded that he cannot support the motion then. Graham stated that she did not believe that the motion or the amendments so far have specified the General Fund and asked if Amery might include this in his amendment. Amery apologized stating that he thought this was already specified in the original motion that they were talking about the General Fund. Graham added that the Committee was clear that they were talking about it, but that she did not hear it in the motions that were just read. Amery agreed. Kaplan commented that he would support the amendment, but he wanted to make sure that the Committee amends the original motion so that it has the specific window was stated. He continued that as Seffinger has read it originally was the way Runkel had wrote it, which was to reduce it rather than recommending to City Council to reduce it in the second year, however that will be stated. He stated this needs to be done so that Council does not have the impossible task of having to identify the cuts in the next couple of weeks. Amery and other members of the Committee comment that they thought this had already been voted on. Bachman asked for clarification, stating that he believed the amendments and the original motion contain the language that would satisfy the concerns presented by Kaplan. Referring to Lohman for clarification Bachman stated that he believed the original motions and amendments do talk about the General Fund and over the full period, adding that whatever was stated has been amended. Kaplan responded that the original motion stated that this was to reduce not recommend. Both Bachman and Amery stated that they believed that this motion was to reduce the budget and that it was a change to the current budget. Hunter asked for clarification from Hanks and Purcell. Hanks stated that the distinction was to reduce the budget or to provide a target for Council to work with. Amery stated that the core of this was that it did not give Council the time it needed to reduce the budget and that the motion was to reduce the General Fund Budget by a million over the next two years. Akins stating a point clarification added that the motion stated that it was to reduce and/or find revenues. She also added that her thought was that everything that comes from the Budget Committee is a recommendation, so Council will still decide as there is a limit in how much boxing in the Budget Committee can do. Hanks added for clarity that the wording does matter and that if you are reducing then a Budget will be brought forward that has the reduction in it. The other thought he gave was to a recommendation being given to Council that does not require a cut in the proposed budget as amended. Purcell further clarified that the distinction is in where the numbers or results are put. If the numbers are put into a resolved clause after the original numbers, then it is a directive to the Council to figure it out over the next two years and if it is a specific cut it is actually an adjustment to those numbers which means that it has to be broken out per State law. She added also that Mayor Akins was correct and that it is not forceable by law to the Council, but that the Committee would be making a recommendation regardless and this recommendation must be published, which then Council would take their own action. She suggested using a separate resolve clause that gives direction to Council, as the difference is in whether this is in actual adopted resolution by number or in the resolved clause that is directed around this. Akins clarified again that the motion stated both cuts and/or find revenue streams, as she did not want it to be keep being said that it was just cuts. She went on to say that voting in favor of this is voting in favor of cuts or identifying revenue streams, as Councilor Seffinger made it clear that this could be done through a variety of ways. Runkel stated he would support this even though he was uncomfortable with the revenue aspect of it. He further added that he did not think the City’s problem was insufficient revenues but in excessive spending and he felt that the language that gives direction is all the Budget Committee can do. He also added that there needs to be trust in the Council to respect the Budget Committee and follow the recommendation and he would be fine with just a recommendation as its Council decision in the long run. Graham asked that with how the amendment is written now if it would require that Council identify the line items or if it would be going as a recommendation, as to her this was the most important part. Purcell responded that as she is understanding Akins clarification and the groups understanding this would be a results clause that reflects back to the adopted numbers, so this would be an amendment to the approval of the budget with the caveat that the City Council is recommended to find $1 million in cuts and or revenues over the next two years. Graham then asked if this was to pass will Council have to identify revenue sources or expenses in June of this year. Purcell responded no. Akins stated that she could not support the amendment as it calls for revenue streams and that although she appreciates the optimism around idea of the possibility of creating revenue streams that aren’t going to directly impact residents, she is doubtful they exist. She continued by saying that she has searched far and wide, as well as had numerous conversations with Hanks and typically these things are not available. Hunter stated that to be clear that the part regarding funding had already been passed and incorporated into the motion and that the amendment was just to specify the dollar amount and to specify general fund. Akins thanked him for clarification. Lohman stated he agreed with this, but he wanted to clarify that the General Fund was specified as this was not added to the original motion or the amendment, so that everyone knew what they were voting on. He clarified that Committee members knew the $1 million revenue addition and that if it was in the general fund, then the Committee needs to speak up so it can be clarified. Alphonso/Hyatt m/s to amend the motion to include the specification to include that the cuts or revenue are to appear in the General Fund DISCUSSION: None Voice/Hand Vote on Amendment: Alphonso, Hyatt, Runkel, Kaplan, Jensen, Graham, Hunter, Morris, Seffinger, Amery, Bachman, Akins, Moran, DueQuenne, YES. None, NO. Moran, Bachman. DueQuenne, ABSTAINED, Amendment passes Unanimously. MOTION AMENDED
Hunter asked if the Committee had any more discussion regarding the motion to increase the amount to $1 million. Voice/Hand Vote on Amendment: Alphonso, Hyatt, Runkel, Kaplan, Jensen, Graham, Hunter, Morris, Seffinger, Amery, Bachman, YES. Morris, NO. Akins, Moran, DueQuenne, ABSTAINED, Amendment passes 10-1, MOTION AMENDED During voting Moran asked if voting was just being done on the $1 million or if it included a vote on cuts and revenues. Hunter replied that had already been voted on.
Amery asked for clarification as the Committee was discussing revenue stream increases, if there were no revenue streams then it would then be assumed that the $1 million would prominently come out of reductions or cuts. The Committee agreed. Amery continued that it would not be one or the other, adding that he would hate for this Committee to not agree to make any cuts at a time when they need to. He then stated that if everyone is willing to admit to the fact that cuts are needed then hopefully Council will take away from all of the Committee’s meetings and Purcell’s comments that furthermore long-term cuts or solutions are needed so that in the future the City does not find itself back in a very difficult situation back to 2008 levels. He ended by saying that he supports the motion.
Bachman stated to the committee that he thought that discussion should be cut off and a vote taken as there was only 10 minutes left of the meeting.
Kaplan suggested and Bachman agreed that the exact motion on what was being voted on needed to be read back. The motion was read back. One correction was noted in the language that the motion was
originally stated as or not and.
Alphonso/Hyatt m/s to amend the motion to change the wording so the motion read cuts and/or revenue. DISCUSSION: None Voice/Hand Vote on Amendment: Alphonso, Hyatt, Runkel, Kaplan, Jensen, Graham, Hunter, Morris, Seffinger, Amery, Bachman, YES. Akins, Moran, DueQuenne, NO. Amendment passes 11-3, MOTION AMENDED
Hunter asked the Committee if they would like to make any final amendments to the motion. No comment was given on this. Hunter asked for a roll call vote.
The motion as amended was read back as:
A motion to recommend that Council look at ways over the next two-year period to increase revenue and/or reduce costs by $1,000,000 in the General fund as a first step in reducing the City’s long-term structural budget deficit.
Moran asked if this would preclude or allow for utility rates to go up as a way to increase revenues. He also added that there was no specificity around the revenue, and this seems like a strange word choice to say that the budget is being reduced by increasing revenues. Akins responded that she understands this but that it has already been voted on. She added that she had mentioned that Utility costs may be a part of this revenue increase. Hanks also responded that it would be any revenues that are General Fund Revenues and Utility Rates are not a General Fund revenue, but fees on a Utility Bill can be General Fund.
The following final motion was voted on:
A motion to recommend that Council look at ways over the next two-year period to increase revenue and/or reduce costs by $1,000,000 in the General fund as a first step in reducing the City’s long-term structural budget deficit. Roll call Vote: Kaplan, Jensen, Seffinger, Alphonso, Graham, Hyatt, Bachman, Morris, Runkel, Hunter, Amery, YES. Akins, DueQuenne, Moran, NO. MOTION PASSES 11-3.
Purcell reminded that Committee that two motions still needed to be voted on which were the passing of the overall budget and that of the property tax rate.
The Committee voted on approving the 2021-2023 Biennial Budget and making recommendations for Policy initiatives as previously motioned and seconded on May 11, 2021. Roll call Vote: Kaplan, Jensen, Seffinger, Alphonso, Graham, Hyatt, Bachman, Morris, Runkel, Hunter, Amery, YES. Akins, DueQuenne, Moran , NO. MOTION PASSES 11-3.
Bachman/Jensen m/s to approve the property tax levy in the amount of $4.2865 per $1,000 of assessed value for fiscal year 2021-2022 and fiscal year 2022-2023 respectively, approve property taxes for the payment of general obligation principal and interest bonded debt in the total of $220,037 for fiscal year 2021-2022, and $215,339 for fiscal year 2022-2023. . DISCUSSION: Amery asked for clarification on the taxes and if they were going up. Purcell responded that the tax rate is actually going down because the debt for Fire Station 1, with the levy only going to pay for Fire Station 2. The operating levy she added remains the same. Roll call Vote: Akins, Amery, Hunter, Kaplan, Alphonso, Graham , Hyatt, Bachman, Morris, Seffinger, Jensen, Runkel, YES. DueQuenne, Moran, NO. MOTION PASSES 12-2.
Hunter ended by stating that he appreciated everyone’s hard work on this. Seffinger commented as well that she hoped that the citizen members knew that they were being listened to.
ADJOURNMENT
Meeting adjourned at 6:00 p.m.
Respectfully submitted,
Natalie Thomason
Administrative Assistant
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