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HomeMy WebLinkAbout2007-0205 Study Session PACKET CITY OF ASHLAND CITY COUNCIL STUDY SESSION AGENDA Monday, January 5, 2007 at 5:15 p.m. Council Chambers, 1175 East Main Street 1 . Look Ahead Review 2. Discussion of Ashland Fiber Network Five- Year Business Plan 3. Review of regular meeting agenda for February 6, 2007 In compliance with the Americans with Disabilities Act, ifyou need special assistance to participate in this meeting,please contact the City Administrator's office at(541) 488-6002(TTYphone number 1-800-735-2900). Notification 72 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to the meeting(28 CFR 35.102-35.104 ADA Title I). The Ashland Fiber Network Five Year Business Plan Presented : February 2007 COMMUNITY BROADBAND s Mw W er Networiz jo Nortv. Mouw C1mw Ave.,As am , ovegow 93s2o Contents PAGE 1 COVER LETTER PAGE 2 TABLE OF CONTENTS PAGE 3 A MESSAGE FROM THE DIRECTOR PAGE 4 OPERATIONAL NET PAGE 5 THE PAST THREE YEARS PAGE 6 CURRENT FINANCIAL SUMMARY PAGE 7 FIVE YEAR FORECAST PAGE 8 REVENUE SUMMARY BY CATEGORY r PAGE 9 REVENUE SUMMARY FOR VOIP (TELEPHONE) & AFN INTERNET PAGE 10 REVENUE SUMMARY FOR WIRELESS INTERNET& HIGH SPEED DATA t PAGE 11 REVENUE SUMMARY FOR WHOLESALE INTERNET & CABLE TELEVISION PAGE 12 EXPENSE DETAIL PAGE 13 CAPITAL PAGE 14 NETWORK REFRESH AND A NEW CMTS PAGE 15 THE FUTURE 2 S pw fi.,Cr NQ aicr< 0G NCV Mcuv. pew.4VC.,AS lAwd, OrCGCw 9�52G A Message From The Director The past ten months have been an exciting time for the Ashland Fiber Network (AFN). In May, 2006, the City Council voted unanimously to move forward with a plan to remake AFN. Since that decision was made, the City has begun the construction of a wireless internet network; leased the CAN video facilities to Ashland Home Net; and has launched a Voice Over Internet Protocol (VOIP)telephone product in partnership with Rio Communications. When I presented to the budget committee in 2006, 1 provided an outline of what the next few years would look like. FY 2006/2007 Restructure AFN According to May 1 Council Decision FY 2007/2008 Regain Network Health FY 200812009 Generate Positive Operational Cash Flow With the restructuring of AFN well underway, it is time to better quantify the next few years. AFN Staff, with the assistance of the finance department, have put together a plan that details revenue, expense, and capital by product line. Since we wholesale most product lines, the City has limited control of customer growth and the associated revenue. As such, staff has projected conservative growth based on current run rates; however, these projections are dependent upon the success of private enterprise. With only a month or two behind us since the spin off of the cable television product and the launch of telephone, both expense and revenue projections are somewhat soft. As each month's financials are released, we will receive more accurate information and as such, a more accurate forecast. This business plan also includes AFN becoming a retail ISP with the expressed purpose of gaining additional collective market share. We are not interested in taking customers from our current ISPs but instead hope to convert current Charter broadband customers, Qwest DSL customers, miscellaneous dial-up customers, and households that do not yet have a connection. I am excited with the level of support experienced by the City Council, my fellow City employees, and the community. I am convinced that support will continue to enable AFN to grow in financial health and to provide excellence in service to Ashland. Joseph Franell Director of Information Technology 3 AS aw er Ne or D NO Moues C MM ve.,A.S 0w , oregm_97520 Operational Net It is important to begin with the "bottom line". Seeing the bottom line up front allows everyone to have a clear picture of where we project AFN's financials will go over the next five years and helps prevent getting lost in the numbers before even getting to the "net". As you can see below, the picture is a good one. The projections represented in this.document reflect an $800,000 positive swing over the nine years covered. FY2008 is an exception in the positive trend of the enterprise due to the amount of capital needed that year to restore network health. Operational NET(Including Capital) $500,000 $400,000 $300,000 - $200,000 $100,000 $0 W W Ol O r N 4100,000 z a s a 0 0 o S N N N ry -$zoo,000 -$300.000 -$400,000 -$500,000 4 AS aw er77777717 o No Mou Cimw ve.,As aw , oregov 97s20 The Past Three Years Below is a view of the past three years' financials. While FY 2005/06 was a much better year financially, the cable television product line still lost $341,442. Spinning off cable TV was the right decision. Revenue growth slowed down from 2005 to 2006 and cable television programming costs continued to rise. FY 2004 FY 2005 FY 2006 Total Personal Services $666,196 $674,108 $787,332 Total Materials and Svcs $1,730,686 $2,034,368 $1,829,570 Total Capital $154,146 $64,311 $160,000 TOTAL EXPENSE $2,551,028 $2,772,787 $2,776,902 Total Internet Revenue $950,645 $1,113,216 $1,248,262 Total Cable Revenue $931,761 $1,140,097 $1,225,884 Total Advertising Revenue $2,906 $7,347 $1,198 Total High Speed Data Revenue $268,688 $217,417 $220,034 TOTAL REVENUE $2,154,000 $2,478,077 $2,695,378 Historical Summary $3,000,000 $2,500,000 $2,000,000 $1,500,000 o TOTAL EXPENSE $1,000,000 ■TOTAL REVENUE $500,000 $0 FY 2004 FY 2005 FY 2006 Note: "Cost of Service" includes Operational and Capital expenses but not Debt Service 5 ASn 0w 0 TL er Ne o•. o No MDRw nm ve.,As cw(, ovegow 97520 Current Financial Summary The year to date, July through December, 2006, financial statement for the Telecommunications Fund showed that AFN was on track for budgetary expenses and was ahead on revenue. This is in large part due to fewer losses in CAN subscriber counts and net gains in billable internet accounts. Additionally, we are under-spending our marketing budget. In summary, AFN's financial outlook is favorable. Operational losses have been stopped and customer counts are higher than anticipated immediately following the transition of the CAN product line. As a result, revenues are higher than were initially projected. 2007 YTD as of 12/31/06 Re rEM ns 2007 Adopted $1,774,000 $1,879,843 YTD Actual $1,196,098 $1,001,390 rce ggoll t / iL n_a 67.42% 53.27%, Year to Date Financial Summary How am f2,000.000 •i�•••••1?5 d•:,•�s-sx—,... �,1� f+.300,000 f1,100.000 s+,doo,000 $1,200,000 -IM O 200TAdo�bd $1,000,000 lominn Bosomy" $300,000 ■VTOAtvaL 1300,000 fdo0,o00 son !200,000 SM so Revenue Expense 6 i AS 0MCI F2 er Ne orrz o NoYtk, Moue QL ve.,.as aw , oregov 9}520 Five Year Forecast The following table is a summary of revenues, expenditures, and the associated "net' for the next five fiscal years. This includes all capital expenses for each year. Since the capital outlay for FY 2007/08 is larger than the following years due to the need to regain network health, the 2007/08 "net' operational cash flow is lower. For subsequent years, we project annual revenue growth of approximately 5%. Total Annual Total Annual Total Gross Gross Annualized Revenue Expense Net FY 07/08 $1,680,874 $1,640,108 $40,767 FY 08/09 $1,767,553 $1,558,036 $209,516 FY 09/10 $1,856,951 $1,613,540 $243,410 FY 10/11 $1,956,078 $1,597,767 $358,311 FY 11/12 $2,060,917 $1,659,369 $401,548 RevenuelExpense Summary $2,500,000 $2,000,000 $1,500,000 ® o Total Annual Gross Revenue $1,000,000 ■Total Annual Gross Expense $500,000 $0 FY FY FY FY FY' 0703 0sro9 09110 10111 11/12 7 As OK4 Mer Ne or o No Moues abw Ave.,As cma, oregow_9.7525 Revenue Summary by Category The assumptions made in projecting revenue are as follows: 1. Voice Over Internet Protocol (VOIP) and AFN Internet Service Provider (ISP) revenues will increase quarter-to-quarter by 5%. 2. Wireless Internet revenue will increase 3% quarter-to-quarter. 3. High Speed Data revenue will increase 2% quarter-to-quarter. 4. Wholesale Internet revenue (revenue from other ISP's) will increase 1% quarter-to- quarter. 5. Ashland Home Net will start 151 Quarter FY 2007/08 with 2400 customers averaging $17.00 per customer per billing month. Cable Television (CATV) revenue will increase 1% quarter-to-quarter for FY 2007/08 and 3% quarter-to-quarter for each year following. Mo hly Revenue by Product Line TOTAL TOTAL Fiscal AFN High Wholesale Monthly Annualized Year VOIP ISP Wireless Seed Internet CAN Gross Gross 2007/08 $732 $2,586 $1,098 $18,239 $109,601 $7,816 $140,073 $1,680,874 2008/09 $824 $3,143 $1,236 $19,495 $114,051 $8,546 $147,296 $1,767,553 2009/10 $927 $3,821 $1,391 $20,305 $118,682 $9,619 $154,746 $1,856,951 2010/11 $1,044 $4,644 $1,566 $21,425 $123,501 $10,826 $163,006 $1,956,078 2011/12 $1,175 $5,645 $1,762 $22,460 $128,516 $12,185 $171,743 $2,060,917 8 ALMCIw 0 FLber Ne or yo NortH moUA mn Ave.,AsKnno, Orego�_97520 Revenue Summary for Voice over Internet Protocol (Telephone) Low Target High Target Gross Gross Gross Gross Monthly Monthly Monthly Annualized Revenue Revenue Revenue Revenue FY 2007/08 $366 $732 $1,464 $8,786 FY 2008/09 $412 $824 $1,648 $9,888 FY 2009/10 $464 $927 $1,855 $11,129 FY 2010/11 $522 $1,044 $2,088 $12,526 FY 2011/12 $587 $1,175 $2,350 $14,098 VOIP (telephone) Revenue $2,500 $2,000 •-. ----+- �Lew Groan Mon[My Rcvcnuc $1.500 -- �-Targa[Groaa MuntM1ly Revenue $1,000 --HigM1 Groan MontM1ly R<r $500 $0 _ g g R Lv Revenue Sum ary for AFN Internet Low Target High Gross Gross Gross Gross Monthly Monthly Monthly Annualized Revenue Revenue Revenue Revenue FY 2007/08 $2,510 $2,586 $2,664 $31,033 FY 2008/09 $2,825 $3,143 $3,492 $37,721 2009110 $3,180 $43,68424 1 $64,577 45,850 010/11 000 FFY Y $3,5 ,73 FY 2011/12 $4,028 $5,645 $7,864 $67, 4 AFN Internet Revenue $7,000 -- $6,000 $5,000 - j-- - EL..Grosz Menthly Rcvmyc Target Gros:$3,000 Monthly Revmm$2,000 nigh Gro.. Monthly Revenge $1.000 $0 � ry 9 ASK P" FLOer Ne or o No h Mouw RLl ve.,A-qKCMC4, oreeow_97520 Revenue Summa for Wireless Internet Low Target High Gross Gross Gross Gross Monthly Monthly Monthly Annualized Revenue Revenue Revenue Revenue FY 2007/08' $822 $1,098 $1,478 $13,178 FY 2008/09; $856 $1,236 $1,869 $14,832 FY 2009/10 $890 $1,391 $2,364 $16,694 FY 2010/11 $927 $1,566 $2,990 $18,789 FY 2011/12 $964 $1,762 1 $3,782 1 $21,148 AFN Wireless Revenue $9,000 $8,000 $7,000 - $6,000 $6,000 !' Monthly R<r<nn< $4,000 �Torq<t Gro:: �� Momhly R<v<na<111110 0$3,000 - -a-Nigh Gro.. $2,000 Monthly R<v<nu< $1.000 $0 on no N N ot n Revenue Summa for High Speed Data Low Target High Gross Gross Gross Gross Monthly Monthly Monthly Annualized Revenue Revenue Revenue Revenue FY 2007/08 $17,358 $18,239 $18,693 $218,870 FY 2008109 $17,751 $19,495 $20,420 $233,939 FY 2009/10 $17,996 $20,305 $21,781 $243,662 FY 2010111 $18,324 $21,425 $23,622 $257,101 FY 2011/12 $18,617 $22,460 $25,024 $269,518 AFN High Speed Data Revenue $9,000 ...._....._._...�--..�.fi.,-.. $8,000 $7,000 $6,000 L..Gre.. $5,000 - - Monthly Revenue - �T<rq<t Grow $4,000 Monthly R<v<n« $3,000 ..- $2,000 Monthly Revma< $1,000 $0 on to _ N A - 10 sn cm er Net o No Mouw aLw Ave.,As Ww , oregm 9,7527 Revenue Summa for Wholesale Internet Low Target High Gross Gross Gross Gross Monthly Monthly Monthly Annualized Revenue Revenue Revenue Revenue FY 2007/08 $108,249 $109,601 $109,882 $1,315,213 FY 2008/09 $110,431 $114,051 $116,625 $1,368,616 FY 2009/10 $112,656 $118,682 $123,782 $1,424,187 FY 2010/11 $114,926 $123,501 $131,377 $1,482,014 FY 2011/12 1 $117,242 $128,516 1 $139,439 $1,542,190 Wholesale Internet Revenue alaill Ha,m d��Qi...._....... 91ss,zrs Low Gros: 9nr,9ss Monthly Revenue Target Gross Nzz,9rs Monthly Revcnuc 9ni,m ' -,s<--High Gross �11z•Ot Monthly Revenue Nrs,w pn,m ry $Y FY2009/10 fY2010011 rY20110 2 2007108 2008109 Revenue Summary for Cable Television Low Target High Gross Gross Gross Gross Monthly Monthly Monthly Annualized Revenue Revenue Revenue Revenue FY 2007/08 $7,758 $7,816 $7,934 $93,795 FY 2008/09 $8,013 $8,546 $9,245 $102,557 FFY 2090 $8939 $9,616 9 $11,237 $115,429 Y 2010/11 $ $1082 $13659 $12916 FY 2011/12 $9,629 $12,185 $16,603 $146,222 Cable Television Revenue $13.000 $17.000 $15,000 Lew Greve $13,000 -- Monthly Revenue --F-Target Grw-e $11,000 ? Monthly Rev<nue $3.000 -+--High Groz r .�..- -- Monthly Rcvanva $7.000 $5.000 11 S CIw . FLOFF N,2177577, O NoYtil Moxw PLe AVe.,AS aw , Oeeceow 9 3X520 Expense Detail mill The below spreadsheet provides more detail of expense history and projections. Following City practice, we applied an annual 7% increase to Personal Services to make sure that increases in health insurance and other benefits were covered. We applied an annual 3% increase to Materials and Services to account for inflation in these areas as well. Capital expenses are based on actual projections for Capital purchases and planned replacement. More specifics for Capital follow on the next page. FY 2004 FY 2005 FY 2006 FY 2007 Historical Historical Historical Projected FY 2008 FY 2009 FY2010 FY 2011 FY 2012 Personal Services Salaries& Wages $457,270 $476,739 $537,930 $399,245 $355,479 $354,766 $384,828 $417,224 $439,806 Fringe Benefits $208,926 $197,369 $249,402 $237,719 $177,072 $198,499 $215,209 $207,092 $236,819 Total Personal Services $666,196 $674,108 $787,332 $636,964 $532,551 $553,265 $600,038 $624,316 $676,625 Materials Services Supplies $253,533 $263,998 $133,659 $307,696 $321,252 $327,735 $329,718 $339,610 $341,714 Rental, Repair, Maintnce $128,887 $95,372 $109,896 $116,974 $71,023 $73,202 $73,543 $75,802 $76,168 Comm $31,478 $15,017 $6,252 $12,009 $5,126 $5,280 $5,280 $5,438 $5,438 Contract Services $196,033 $410,368 $126,302 $44,663 $52,991 $62,009 $63,366 $65,267 $66,707 Misc. Charges& Fees $379.833 $417,571 $539,687 $380,138 $277,462 $272,617 $275,506 $283,907 $286,983 Other Purchase d Services $740,922 $832,042 $913,774 $216,032 1 $58,703 $69,653 $71,814 $74,151 $76,459 Total Materials and Svcs $1,730,686 $2,034,368 $1,829,570 -$1,077,511 $786,556 $810,497 $819,228 $844,176 $853,469 Capital E ui mnt $0 $0 $120,000 $70,000 $201,000 $134,275 $134,275 $44,275 $44,275 Imprvmnts Orr Bld s $154,146 $64,311 $40,000 $0 $120,000 $60,000 $60,000 $85,000 $85,000 Total Capital $154,146 $64,311 $160,000 $70,000 $321,000 $194,275 $194,275 $129,275 $12V75 TOTAL $2,551,028 $2,772,787 $2,776,902 $1,784,475 $1,640,108 $1,558,036 $1,613,540 $1,5975767 1 $1,659,369 12 As Qn. er N? or 90 Nortk MORw Caw Ave.,AS CIw C(' oregow 9}520 Capital The Capital projections listed in the table below are the same as included in the City's Capital Improvement Plan. Unlike in years past, we are accounting for depreciation and planned replacement of equipment and network components by setting aside a percentage of the value of an item each year in advance. For example, next year, we will replace the Cable Modem Termination System (CMTS). Each year following, we set aside 20% of the value of a new CMTS based on a projected five year life span. This results in the City not having to have spikes in the Capital expense projections for AFN after next year. Put Reroute Fiber Wireless Fields Maps in Network Buildout CMTS Routers Project GIS Refresh 2007/08 $15,000 $125,000 $20,000 $40,000 $20,000 $10,000 2008/09 $0 $25,000 $4,000 $0 $0 $10,000 2009110 $0 $25,000 $4,000 $0 $0 $10,000 2010/11 $0 $25,000 $4,000 $0 $0 $10,000 2011/12 $0 $25,000 $4,000 $0 $0 $10,000 2012/13 $0 $25,000 $4,000 $0 $0 $10,000 2013/14 $0 1 $25,000 1 $4,000 $0 $0 $10,000 Under ground WiMax FTTP Machine TDR OTDR Locator TOTAL - 2007/08 $0 $50,000 $23,000 $2,000 $11,000 $5,000 $230,000 2008/09 $100,000 $50,000 $2,300 $400 $1,575 $1,000 $39,000 2009/10 $100,000 $50,000 $2,300 $400 $1,575 $1,000 $39,000 2010111 $10,000 $75,000 $2,300 $400 $1,575 $1,000 $39,000 2011/12 $10,000 $75,000 $2,300 $400 $1,575 $1,000 $39,000 2012/13 $10,000 $75,000 $2,300 $400 $1,575 $1,000 $39,000 2013/14 $10,000 $75,000 $2,300 $400 $1,575 $1,000 $39,000 13 AskLclma FLOIr Ne or D ND MoUw cfm Ave.,As ctw d, oregow 97520 Network Refresh and a New CMTS As stated during the May 1, 2006 City Council meeting and during the IT Departmental budget briefing, there has been no planned replacement of key network components to date. As a result, some of those components are past "end-of-life" and must be replaced immediately. The most pressing need is the replacement of the Cable Modem Termination System (CMTS). It is a system of devices located in the cable head-end that allows AFN to offer high-speed Internet access to home computers. The CMTS sends and receives digital cable modem signals on our cable network, receiving signals sent upstream from a user's cable modem, converting the signals into IP packets and routing the signals to one of our Internet Service Providers for connection to the Internet. The CMTS also can send signals downstream to the user's cable modem. Cable modems cannot communicate directly with each other; they must communicate by channeling their signals through the CMTS. Current CMTS New CMTS Processor Utilization @ 100% Scaleable DOCSIS 1.1 Compliant 2.0 & Upgradeable Quality of Service Functionality Minimally Supported Fully Supported Download Speed 3-5 Mb s Maximum Greater than 10 Mb s Upload Speed 1 Mb s Maximum Greater than 10 Mb s Vendor Support Features, Fixes No Longer Supported Fully Supported The new CMTS will allow AFN to provide the next level of internet service with significantly faster speeds and better quality of service. In addition to the replacement of the CMTS, the AFN staff will do planned maintenance on and replacement of other key network components to include; optical nodes, power supplies and batteries, and other active devices in the outside plant. 14 777M Mer Net 90 Nortih, Moues a�H.Ave.,Ash Loes g, oregow 9}520 The Future With our recent restructuring of AFN so fresh in our minds, talking about the future is critical. Since AFN has technology centric services and the one constant in technology is that it keeps changing, the AFN team must constantly look to and plan for the future in order to ensure the community continues to enjoy the benefits of state of the art telecommunications products and services. While the future of technology is rarely crystal clear, we can make educated projections of future needs and what products will best fill those needs. This business plan allows for the continued build-out of the wireless internet product we currently have deployed in parts of the city. It also includes;a planned migration to a WiMax solution that is the next generation of wireless internet. We've included continued fiber to the premise installations for those with high-bandwidth application requirements and the plan includes the purchase and installation of a new CMTS. There are other, new technologies that are just now beginning to be seen in the market that we will watch to see if they provide warranted benefit to Ashland. We will update the capital plan as appropriate to make sure that the investment in the Ashland Fiber Network stays meaningful well into the future. Finally, we will continue to fine tune this plan as we get better run rates and are able to more accurately trend both expenses and revenues. 15 ASK2w 0 7677 Metwom yo Norto Mouw aLw AVe.,ASKCmCl, Oregon 97520 CITY OF ASHLAND Imbortant: Any citizen attending council meetings may speak on any item.on the agenda, unless it is'-the ' subject of a public hearing,which has been closed. The Public Forum is the time to speak on any subject not on the printed agenda. If you wish to speak, please fill out the Speaker-Request form located near the entrance to the Council Chambers—The chair will recognize you and inform you as to the amount-of time allotted to you. The time granted will be dependent to some extent on the nature of the item under discussion,the number of people who wish to be heard, and the length of the agenda. AGENDA FOR THE REGULAR MEETING ASHLAND CITY COUNCIL February 6, 2007 Civic Center Council Chambers 1175 E. Main Street 7:00 p.m. Regular Meeting I. CALL TO ORDER II. PLEDGE OF ALLEGIANCE III. ROLL CALL IV. MAYOR'S ANNOUNCEMENT OF BOARD AND COMMISSION VACANCIES V. APPROVAL OF MINUTES [5 minutes] 1. Executive Session meeting minutes of January 16, 2007 2. Regular Council meeting minutes of January 16, 2007 VI. SPECIAL PRESENTATIONS &AWARDS None. VII. CONSENT AGENDA [5 minutes] 1. Minutes of Boards, Commissions, and Committees 2. Confirmation of Appointment of the Police Chief 3. Approval of Public Contract for a Term Exceeding Two Years— Multifunction Business Machine Lease 4. Council Liaisons 2007 5. Appointment of Judge Pro Tern 6. Approval of a Common Boundary Line 7. Termination of Easement at 829 North Main Street 8. Acceptance of a Public Utility Easement at 150 Lithia Way 9. Internet Bandwidth Contract Approval 10. Mid-Year Financial Report: July- December 2006 11. Approval of Public Contract for Transformer Disposal Services 12. Acceptance of Deed of Dedication 13.Approval for Ashland to Continue in Lawsuit COUNCIL, MEETINGS ARE BROADCAST LIVE ON CHANNEL 9 VISIT THE CITY OF ASHLAND'S WEB SITE AT WWW.ASHLAND.OR.US VIII. PUBLIC HEARINGS (Testimony limited to 5 minutes per speaker, unless it is the subject of a Land Use Appeal. All hearings must conclude by 9:00 p.m., be continued to a subsequent meeting, or be extended to 9:30 p.m. by a two-thirds vote of council (AMC §2.04.040)) 1. Request for Approval of Fee and Policy Recommendations [30 Minutes] IX. PUBLIC FORUM Business from the audience not included on the agenda. (Total time allowed for Public Forum is 15 minutes. Speakers are limited to 5 minutes or less, depending on the number of individuals wishing to speak.) [15 minutes maximum] X. UNFINISHED BUSINESS 1. Approval of City Charter Ballot Measure [15 Minutes] 2. Discussion of Transient Occupancy Tax Use [30 Minutes] 3. Discussion of Interim Library Funding Options[15 Minutes] 4. Discussion of Annual Budget Process and Calendar[30 Minutes] XI. NEW AND MISCELLANEOUS BUSINESS 1. Federal Appropriations [5 Minutes] 2.. Ashland Fiber Network Five-Year Business Plan [30 Minutes] XII. ORDINANCES, RESOLUTIONS AND CONTRACTS 1. First Reading of a Resolution Titled "A Resolution of the City of Ashland Authorizing an Interim Bond Financing Loan From the Special Public Works Fund By Entering into a Loan Contract with the Oregon Economic and Community Development Department for the Jefferson and Washington Street Improvements Project Number 806003" 2. First Reading by title only of an Ordinance Titled "An Ordinance Amending AMC 3.08.020 To Apply Ethics Provisions to Employees, Appointed Officials and Elected Officials" XIII. OTHER BUSINESS FROM COUNCIL MEMBERS/REPORTS FROM COUNCIL LIAISONS XIV. ADJOURNMENT In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Administrator's office at(541) 488-6002(TTY phone number 1-800-735- 2900). Notification 72 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to the meeting (28 CFR 35.102-35.104 ADA Title I). r COUNCIL MEETINGS ARE BROADCAST LIVE ON CHANNEL 9 VISIT TI IE CITY OF ASHLAND'S WEB SITE AT W W W.ASI-ILAND.OR.US Community Dialogue Meeting Keeping Our Library Open January 29, 2007 Historic Ashland Armory 7 p Introduction and Welcome— Holly East Panelists presented facts relating to the library closure issue relating to their offices. Panelist included John Snider from Rep Walden's office, Dave Gilmour from the Jackson County Commissioners, Cathy Shaw, representing State legislators, Martha Bennett, representing the City of Ashland, and Anne Billeter, representing the County library system. Martha Bennett, City Administrator Introduced city counselors present—Russ Silbinger, Eric Navikas, Alice Hardesty. What city is doing an not doing—Ballot measure for May election as plan C—to keep Ashland library open in case county libraries can't open—has matrix handout with assumptions— cost 1.4 mill to operate, city can do less and spend less, not replicate level of operations. County wide system is better than Ashland only operation. Library would be a general fund (taxes supported) service. GF also supports parks, planning, fire, police, etc. = 12 million fund in Ashland. Can't absorb library without reducing other services. Stop gap measure—city wants regional option. Odd election year is tough time for regional solution. Could mean library is closed for year. What would happen to staff, books? These are county questions. Complicated questions which would need to be resolved. City Council wants voter authorization before making a decision so there will be a ballot—needs to be a double majority= 6200 voters in Ashland. Property tax is on assessed value, not real market value. Anne Billeter, County Library Jackson Co library is single system with one governing agency, 15 branch libraries. Plan was to achieve more with central, efficient system and yet providing individual services to each community according to need. (For example: reference librarians in Ashland, service to tourists to use email and do research—therefore more computers in Ashland.) Single person selects children's library books, efficient. Also, share 120,000 library materials, via SOLIS have access to almost 1 million materials. Small libraries could have been stagnant, but now rotate materials between libraries to bring fresh books and books on cassette into each branch. Ashland is included in this rotation system. Branch requests are also active. We would be in same financial difficulty even if we didn't build the buildings—it is the operating funds which are short. New buildings are heavily used =meeting rooms, etc. 8.2 million to operate, great bit is personnel, smaller amount is materials. Ashland branch serves 20,000 borrowers—much more than just in Ashland city boundaries. Dave Gilmour, county Commission Surveyed room: approximately 25% moved here in last 5 years, 10% in last 10, 10% in last 25. Explained O & C monies 1937 Fed government worked with counties to give them a portion of timber sales to fund services. Worked well when small, not as well in poor economy of 1980s. Lost population then. Libraries sustained by succession of levies. Measure 50 consolidated existing levies but didn't make promises for future. County sustained services to present level of 8 million. Not Incl. buildings. Not able to get reauthorization of O & C funds. Been a 12 year issue. Has been reauthorized twice. Last year stalled. Greg Walden has been working on this. 260 million budget. Only have discretion on some percentage of funds. We do have discretionary funds on 43 mill, incl. 23 mill for libraries. Budget committee prioritized funds over last year and half. Top priority is health and human services, and public safety. Community health center could die without these funds. This was done in public process, not covered well by media. Lots of cuts in health and human services, roads, sheriff,jails, etc. in addition to libraries. Cathy Shaw, State Senator Alan Bates and Representative Peter Buckley Charts—Jackson County operating funds—26% non-dedicated revenue source, 60% from property tax. 43 mill. 65% sheriff, 5% health, 19% libraries, other health and human services, etc. 1.94/1000 used now under measure 50. 6,500,000 county budget. Libraries about 8 million. Not just a library issue, also a public safety issue. Why an income tax vs. property tax. Income is more progressive, property and fees are more regressive. Gets us off O&C rollercoaster. Is deductable. Cost about 61 c. per person. 30 million comes in. Will be tax deductable. Protects bond rating by stabilizing revenue stream. Problems=writing tax codes, requires legislation to standardize. Won't get funds until 2009. Can only be voted on in Nov 08. Library supporters have asked for district., but been denied. Could use rainy day fund to get us to 2008 election. John Snider, Rep. Greg Walden's office Funding declined 70%, time is up for stop gap measure. Rep Walden, HR 17 for reauthorization. Even if passed, would be a gap in funding. Would need a continuing resolution to keep government going in interim. Fed government has obligation to these 18 counties which are affected by this loss. 100 jobs lost. Haven't given up. Long shot. 2 billion dollars of O&C, 50% goes to Oregon. Have to decide what to do in 7 years even if reauthorized. Law enforcement and public health and safety are also issues. Possibility Statements Table 1: Want to have enough self-sufficient and sustainable income to sustain Jackson county services at the current level Table 2: Graph—Immediate bridge measure. Student needs books available for her next project right away. Can't make library separate from other economic issues. Look at UGB and sustainable economies and inviting businesses in. Need to have serious long term solution— controlled locally. Table 3: Library district is essential to operate separately from other system. Income tax would work best. As a bridge, pass a two year temporary income tax in May 2007 ballot. Libraries would be charged with public information campaign to explain their usefulness to whole area. Table 4: We must consider all of the county services. The solution must address all of them. It is stronger to work together. (Libraries are just the first on.the chopping block— canary in the coal mine.) We need to free ourselves from O&C funds - to have stable funding source to fund all endangered services. Liked income tax best= least regressive - I% - Would have strength of funding all services to pass it. Perhaps there are ways (creative, community-spirited) to increase use of volunteers. Will need a bridge until that tax can be collected—perhaps a rainy day fund and.... The vision is to continue tradition of parents to provide these services to protect and build community for our children. A powerful vision honestly interpreted will carry the day. It is an assumption that we don't like taxes. Table 5: Political discussion. Unanimously must be a county-wide solution. About 6000 volunteers to get sufficient voters (60,000) to turn out for double majority and we think there is enough energy behind it. If county won't put on May ballot, then look at the city or school district to put local option on May ballot to cover larger area, serve more people, cost less. (Can school district do this and pass $ to county to operate libraries?) Table 6: We desire to keep the libraries open and functioning at a reasonable level by exploring cost cutting through close evaluation of city and county budgets, consolidation of branches, expanded use of volunteers and stable funding by creating a library district or instituting an income tax or imposing a utility surcharge. Table 7: Not whole solution = library foundation would be able to funnel donated funds as supplement. Ashland hotel/motel tax to put toward library. Table 8: Ideas: Out of a crisis, creative solution = better system possible. Local responsibility for funding should be goal. Don't count on Federal funds. Sophisticated info. Technology =move toward virtual library. Perhaps option for bridge to supply books and information. Public-private partnership: possible for government to provide facility, heat, materials and private provides management, personnel, components of the library via public-private combination. Also private financial component possible. Always remember we are part of county community—reach out to other sympathetic county partners to reach solutions. Table 9: Need more organization. Create an organization = research committee, arm for funding via stores, theater with theme— save our art (library theme). With this organization, we might accomplish more goals, make community more aware, political action. Representatives of county need to hear from community. Recall option. Table 10: What is = we love our libraries and they must stay open. Need both short term and long term solutions The short term solution is the County rainy day fund. Long term solutions should spread the $ responsibilities across as many entities as possible. Any taxes need to stand on own merit. Income, property, Ashland sales tax — use well. Consider all suggestions. K Falls has special district created 5 years ago and have funding now. RCC district option. Long term budget plan. Need to scrutinize budget carefully! (need to address concerns of those who still think there is waste and mismanagement within the county government). Table 11: Envision county-wide solution to keep libraries open through current budget year. Put a County measure on the ballot with an Ashland measure in background. Stop gap include rainy day fund, grants, city activities levy, consolidation of branches, rent out branches for income. Be creative. Table 12: We're in this together. Opposed to you're on your own. Want a Jackson Co. library system. Need to try a property tax. This could pass county wide. Need to move on beyond this to 1% income tax for future. Should consider and discuss a sales tax on luxury items statewide. Should close loop holes to Oregon state taxes. Get rid of kicker also. Need serious economically sound and public funding for public goods and services. Table 13: Would like county-wide solution to library problem. Need stop gap for Ashland. Need certainties from Co. to have access to computer system and courier and these would need to be accessible to any county library with their own funding system. Could have a county-city cooperative system, a library district and could use any of funding mechanism discussed tonight. Will not be a quick fix. Table 14: Bring troops home first. Have a county solution. May ballot item. Adequately fund all library services. Privatize libraries first. Make county solution for all services not just library. Back up to support Ashland library. Educate voters that we are only voting on operations. Need to mobilize multiple groups to get this passed. Table 15: Important to keep county wide system. This is commissioner problem. This discussion needs to be re-voiced so libraries are not scape-goat. We are losing family- wage jobs. Income tax idea is a good one. Need to re-evaluate staff/branch uses. May not need libraries in each community. Evaluate cost-saving measures. 16. (same table) Seek solutions which also solve greater problem of economic viability of our region. Review of"white paper" notes from tables: Can we operate the system with less money than 8 million or as a core for City-run libraries? Could we do with fewer branch libraries? Cut hours and services? Rent out closed library space? What are possibilities for long-term funding? The County should speak out to say it will support the City's effort to keep the library open Try to pass measure again with smaller$ amount. Voluntary donations, foundation grants? Privatize The Ashland option might work for awhile, but we need the county-wide resources Some states have statewide systems Disparity of income tax in a city or county would cause us to lose residents. Sales tax?, Property tax? State funding? Why put bail-out of system on home-owners? 2% Sales tax —on May 2008 ballot? User fee? Friends of Library fund drive—corporations and individuals? Library foundation for whole county. Be more creative about fund-raising for immediate needs. Supermarket donation centers? Extra dollar charged onto OSF, Britt, other theater tickets? "Support our heart— fund libraries, the heart of our community", Encourage visitors to visit our libraries —access fee? Grants? Can we borrow against county's rainy day fund? Can libraries be run with more volunteers? Best to save entire county system Responsibility of federal and local government to fund libraries. Create a strong looby to force elected officials to take care of local issues. Everyone— call representatives to cut off war funding. Possibilities— County income tax, library district. There is huge shortfall of$ across board. Put $ into social betterment. Do away with ballot measure system Refocus on big picture - $23,000,000 shortfall We wish to see a plan to solve the $23 million shortfall. A county income tax and a library district were felt to be good ways to do this. Create a library district using an income tax idea (ie. Cathy Shaw). In the meantime, use a one or two year volunteer system (as in volunteer fire districts). $100,000 a year for building 80,000 for a head librarian 50,000 for a secondary librarian (to train volunteers) $230,000 20,000 miscellaneous $250,000 one year budget Collect a fee from half the Ashland population — collect $500,000 a year, bank $250,000. Each city would do this. Possibility Statement: We need to have enough self-sufficient and sustainable income to maintain countywide library service as good as what we have. Possibility Statement: This is not a library problem only. The County must re-evaluate how to provide a stable funding source for essential programs including libraries. Perhaps a downsized "hub" system of libraries can be helpful for the long term health of the system, and that the library system needs its own taxing district, perhaps an income tax would be the most equitable tax base to pursue. Address issues of I. libraries obsolete (esp. for young people)?, 2. what is "bare bones" budget?, 3. what about these new buildings? What are criteria of acceptable solutions? Context—the war! (elephant in the living room) Mismanagement? What about income tax vs. property tax? What about if its just for a year? Close the jail and sheriff's department! (65%) Make a statement! Use netflix model — open a few hours. Move prisoners/meth addicts into libraries. Fees—tax sports venues - $1 fee per ticket Rent space in library Donate to tax deduction if designate for operating expenses Match with Oregon cultural trust Endowment fund interest eams Library foundation as collection agency. Fee on book sales Only county wide solution because entire county paid bond for buildings Advertising tax Present reasons for library better Save $ on multiple purchases for Jackson County Reads (250 books bought) Fundamental fairness for everyone Divert some Ashland taxes to go to library (like the hotel/motel tax that now goes to Chamber of Commerce and OSF) Rent out libraries as homeless shelters We want to create an organization to create: a research committee with an arm for funding (stores, theater, theme (save our heart) with a citizen education awareness with local and federal political action (library lobby) Through a resolution, recall CW Smith, who has not shown positive action toward saving this library The foundation is in place: concerned citizens, passion for cause All groups need to unite for a common goal Local sustainability needs to be the umbrella concept encompassing health services, libraries, quality of life, education-sou, rcc, asd, technology, parks, public safety, culture, economy. On one side: "We will continue to lose quality of life if we don't expand the economy", on the other: "We can't be a 3`d world economy dependent on resource extraction, retirees, and tourism!" Another side: "It's not an isolated library problem" Another side: "Libraries are really important. I need those books for school projects" Economic Welfare: long term: diversify tax base— sales, income, property, extend urban growth boundary, invite sustainable industry, expand our base for property tax, less Wal- Mart/Home Depot, look for international models. Bridge Measures: Short term: volunteers for library, school district libraries, rainy day fund. Diversify tax base— sales, income, expand our base— link growth to libraries. Schools as library partners Volunteer system Think small/local —be sustainable Focus on what we can control Don't separate "Ashland sustainable center for technology, education, culture and economy" Ashland issues: workforce housing, small business—high tech est. themselves, difficult losses (SOU, skating rink, pool closure— any one thing "expendable"=losing quality of life! Highway 99 property not necessarily used for highest and best services. Can we expand city urban growth boundaries + get more businesses and housing therefore expanding tax base? It is the job of public officials to allocate public funds for the public interest. Turned culture from "citizens to consumers" Federal government has greatest taxing authority via income tax. Some of that money flowed back to local governments for revenue sharing. Oregon depends on extraction industries. Look at economics of the community. Is library taking hit for sheriff's department? Laura Bush grants? Ashland may be able to economize in several-city operations to divert money toward keeping the library open. Go through Ashland's budget with a fine toothed comb. One example of frivolous spending would be the BMW motorcycles used by the Ashland Police Department. If no money can be diverted from the Ashland budget to keep the library in operation, the city should examine other alternatives for raising the money from citizens in general: not merely homeowners. To have renters share the library expense,the likeliest and fairest source would be a surtax on water use and/or electricity use. This would aid in economization, which is quite important to Ashland's future.