HomeMy WebLinkAbout2006-05-04 Budget Committee Minutes
BUDGET COMMITTEE MEETING
MAY 4, 2006 - PAGE 1 OF 6
Budget Committee Meeting
Draft Minutes
May 4, 2006, 7:00pm
Civic Center Council Chambers, 1175 East Main Street
CALL TO ORDER
Chairman Marty Levine called the Ashland Budget Committee meeting to order at 7:00 p.m. on
May 4, 2006 in the Civic Center Council Chambers, 1175 E. Main Street Ashland, Oregon.
ROLL CALL
Mayor Morrison was present. Council members Amarotico, Chapman, Jackson, Hartzell,
Silbiger, and Hardesty were present. Budget Committee members Bond, Everson, Stebbins,
Levine, Gregorio, Thompson, Mackris were present.
STAFF PRESENT: LEE TUNEBERG, AMINISTRATIVE SERVICES DIRECTOR
DICK WANDERSCHIED, ELECTRIC DIRECTOR
SCOTT JOHNSON, OPERATIONS SUPERINTENDENT
CINDY HANKS, PROJECT MANAGER
VERONICA WARD, ADMINISTRATIVE ASSISTANT
Chair Levine read quotes from Roberts Rules of Order. At the previous Budget Committee
meeting, the Committee questioned if the Chairperson had the right to vote or if the Chairperson
only voted in a case of a tie. The result was that the Chairperson does have the authority to
vote; subject to rules or custom of a particular board if the Chairperson had never voted and the
people believe the Chairperson should not vote then follow that custom. It is best to discuss the
rules and procedures with the board to have a clear understanding of the roles the Chairperson
should follow. The custom of the Ashland Budget Committee is that the Chairperson does have
the right to vote.
Chair Levine clarified the Committee has not approved the Fire Department’s budget and
explained the motion made at the previous meeting did not pass because the vote resulted in a
tie.
Thompson/Gregorio m/s to amend the Fire Department’s budget in a manner that would
permit a portion of the budget to be used to increase the CERT position to full time and
allocate the dispatch costs to the Police Department. DISCUSSION: Mr. Tuneberg clarified
the motion is contingent on there being sufficient funds in the Police Department’s budget for
the dispatch service. He stated he had spoken with the Fire Chief about this and recommended
that the Fire Department’s budget be reduced by $43,000 for dispatch and add back $20,000 in
order to make the CERT position full time. He added the remaining $23,000 would go to the
fund balance. Councilor Silbiger and Amarotico requested permission to abstain from the vote
since they were not present for the presentation and discussion. Committee reached consensus
to allow Silbiger and Amarotico to abstain. Voice Vote: Hardesty, Chapman, Jackson,
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MAY 4, 2006 - PAGE 2 OF 6
Hartzell, Bond, Everson, Stebbins, Levine, Gregorio, Thompson, and Mackris, yes.
Silbiger and Amarotico abstained. Motion passed.
Morrison / Thompson m/s to accept the Fire Department budget as presented and
amended. Voice Vote: Hardesty, Chapman, Jackson, Hartzell, Bond, Everson, Stebbins,
Levine, Gregorio, Thompson, and Mackris, yes. Silbiger and Amarotico abstained.
Motion passed.
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Bond / Everson m/s to approve the Budget Committee meeting minutes from April 20
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and 24
, 2006. DISCUSSION: Thompson proposed a correction to the minutes of April 20,
2006. Thompson read the statement for page three, paragraph five that she intended to make
for the record.
“Lynn Thompson Committee Member expressed her concern that a significant amount of
unspent budgeted monies may reflect overly conservative budgeting particularly if property
taxes were increased to fund the unspent budget. She noted that this year the budget
committee is being asked to fund a number of staff positions by increasing property taxes and in
that situation we should look carefully at areas where budget monies have traditionally been
unspent before raising taxes. Thompson understood that Mr. Tuneberg explained that unspent
money increases fund balances which can be used in the subsequent year and that staff would
hold off on increases in fees and rates until the fund balances are know so they can be utilized.“
Bond / Everson accepted the amendment made by Thompson to the original minutes
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from April 20, 2006. DISCUSSION: Morrison did not support the m/s to amend the minutes,
his understanding of the minutes is that often the Council or Committee members felt they might
have been misrepresented yet the minutes reflect what was actually stated. Morrison cautioned
the Committee that they need to be careful of maintaining an accurate record of what was said
rather than 20/20 hind sight. Gregorio asked the custom of the Committee specifically in
amending minutes. Levine recalled that the Committee had amended minutes in the past and
Morrison did not specifically recall if the Committee had or had not. Levine stated that generally
amendments have been done before and recalled a specific example of a committee members
name was incorrectly attributed to a statement that was then corrected. Morrison stated that
situation is where a statement was attributed to the wrong person was selected not a
characterization error. Thompson stated she felt the minutes were summarized in a way that
conveyed a different impression than she thought she meant to convey. She also stated that
she would agree with Morrison’s statement if they were dealing with transcripts but the fact that
the minutes are in a summary form. No other discussion. Voice Vote:Silbiger, Amarotico
Hardesty, Jackson, Hartzell, Bond, Stebbins, Levine, Gregorio, Thompson, Mackris YES.
Everson, Morrison, Chapman NO. Motion passed 11 to 3.
PUBLIC INPUT
None
ELECTRIC DEPARTMENT PRESENTATION:
Dick Wanderscheid, Director of the Electric department introduced Scott Johnson the
Operations Superintendent and began with a brief history of the Electric Department. Mr.
Wanderscheid explained the relationship and contract between City of Ashland and Bonneville
BUDGET COMMITTEE MEETING
MAY 4, 2006 - PAGE 3 OF 6
Power Association (BPA). The City receives 98% of its power from BPA and the remaining 2%
is generated by the City’s hydro-generator at the Water Treatment Plant. BPA has been in a
legal rate case, these rates will affect the rates for the next three years and will take affect
October 1, 2006. Actual rates won’t be determined until August of 2006 and can be adjusted as
late as September 2006, after the BPA third quarter financial report is released.
The proposed budget has a net 2% rate increase but the department has decided to hold off on
rate changes until August when the department will be able to find out what the BPA rate would
be and would have a better idea of the June 30, 2006 fund balance. He stated that the net 2%
increase to rates would be the worst case scenario. The City’s electric utility covers all of
Electric departments operating cost and generates money for other City operations. In 2005 the
City’s electric user’s tax generated $2.3 million for the general fund and the 10% franchise fee
generated $1.1million.
Mr. Wanderscheid began speaking with the Capital Improvement Plan (CIP) on page 2-5 of the
proposed budget. He went over the items listed on page 2-4 for the next six years under CIP.
Mr. Wanderscheid expressed the need to repair the Enclosed Open Equipment Building at the
service center. $120,000 had been budgeted last year for the project to enclose the building,
but the project was not able to be started due to lack of bids. This year’s proposed budget
included an additional $100,000 to enclose the building and contract most of the work to the
Public Works department. He referenced the Ten Year Electric System Planning Study book as
to the improvements needed for the Electric Infrastructure. The Electric Department proposed
these projects for this fiscal year.
Upgrade the business district feeder line on Helman Street.
Underground the remainder of Oak Knoll
Complete the underground feed to the Water Treatment Plant
Begin shifting some of the load from one substation to another.
Mr. Wanderscheid noted that it is important that the repair to the line at the Water Treatment
Plant is finished this coming budget year. In a situation where the City is without power for an
extended amount of time, the Water treatment Plant would not be able to function. Mr.
Wanderscheid touched on the other noted projects and the importance of each one. He then
directed the committee to look at page 3-114 in the proposed budget to see the breakdown of
cost in “improvements other than buildings”.
The Committee questioned if the cost of “Install New Services & Transformers” under CIP is
recuperated by SDC fees. Mr. Wanderscheid responded that a good portion of the cost is
recuperated through other fees charged for new development but they do not charge SDC fees
for these services.
The Committee asked for clarification to which project that was not listed in the Electric System
Study report. Mr. Wanderscheid responded that the one project not in report the one for the
Mountain Ave Substation to the low side for shifting the electric load. The Committee then asked
if the equipment stored in the Open Equipment Building has been damaged when it had been
moved for cleaning. Mr. Wanderscheid responded that equipment is not typically damaged and
that the equipment is made for the outdoors. The moving of the equipment in and out of the
building for cleaning is more of a time consuming and labor intensive project and a health
concern for those working with the equipment.
The Committee asked if the infrastructure costs associated with Ashland Fiber Network (AFN)
are things that are built into the Electric budget, referenced page 2-91. Mr. Wanderscheid
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MAY 4, 2006 - PAGE 4 OF 6
replied that the AFN budget is separate. If AFN had capital projects the cost would be funded
out of the AFN budget. If the Electric department does work for the AFN department, they are
billed by Electric for that work. Anytime the departments have a project completed jointly the
cost are also shared. The Committee and Mr. Wanderscheid discussed the alternatives and
long term goals of the repairs to the Electric Equipment Building.
Mr. Wanderscheid discussed the Supply Division in the proposed budget. He spoke about the
detail of each line item listed on page 3-113 and noted the $45,000 is for the repair of the hydro
facility. He also stated that last year the City hired a firm to evaluate the repairs for the hydro
facility when that went out to bid the bids came back much higher than expected. The
department reevaluated the project and decided to do much of the repairs in house. The
Electric department is going back to the public with a revised Request For Proposal (RFP) and
believe the project will be completed at the budgeted $45,000. The Committee asked if the need
is for general maintenance or if there was equipment failure. Mr. Wanderscheid responded that
there are both needs. The City does what they are able to do in both mechanical and electrical
maintenance, but the department does not have the ability to do some of the required
maintenance. The RFP would allow a contracted company to provide scheduled maintenance
and the City would continue to repair what they can to keep the cost down.
Mr. Wanderscheid explained the Transmission division detail on page 3-113; he also explained
that the numbers in the proposed are very close to the prior year’s budget. He continued to
explain the Operations division (Distribution) budget which contains all personnel in Electric
department except the Conservation Department. The Conservation Department has a separate
budget. Mr. Wanderscheid referred to page 3-111 and discussed the personnel costs that have
risen in the proposed budget due to the Cost of Living Adjustment’s (COLA) and the addition of
an additional line installer. Mr. Wanderscheid explained the regulations that are imposed by the
PUC and the work load those regulations require.
The Committee questioned the net cost of the additional position. Mr. Wanderscheid responded
it is approximately an additional $75,000-80,000. It would allow them to bring in a lineman in
year round and for 6 months of the year, a tree trimmer to assist staff. The Committee
questioned the remainder of the increase. Mr. Wanderscheid responded it is the COLA,
Healthcare, and PERS for the additional employee. Mr. Wanderscheid explained that the line
installer will assist with new construction as well as daily duties and responsibilities within the
department. He explained that the fees that they are charging the developers cover the costs of
putting infrastructures in. It has been a tremendous savings to the City that they no longer have
to pay and put in the conduit, the developers do.
Arlen Gregorio asked if staff would explain the increase of the position to him at a later time.
The Committee asked if the projection for power sales would be about the same as the previous
year for the General Fund. Mr. Wanderscheid explained that if the electric rate increase goes
into affect, the franchise fee would go up another $100,000 which means more would go into
the General Fund. If the amount of electricity that is sold increases, then the 10% franchise fee
and the 25% users tax would also increase. The electric users tax goes directly into the General
Fund and the franchise fee is 10% of sales and is in their budget.
The Committee asked to clarify that new construction does not pay for itself. Mr. Wanderscheid
responded that the cost of servicing the new construction is covered by the fees charged.
Mr. Wanderscheid explained that beginning in 2006, a portion of his salary was no longer
shared by AFN, his salary is reflected completely in the Electric budget.
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MAY 4, 2006 - PAGE 5 OF 6
Mr. Wanderscheid spoke to the increase in Materials and Services attributed to increased
central service and facilities fees, and franchise fees. Part of Miscellaneous Charges and fees
are $67,000 of the electric revenues going to low income assistance programs. Mr.
Wanderscheid added that he has looked into buying green power and the response from BPA is
that it won’t be any less expensive.
The Committee clarified that the administrative secretary position should only be .50 FTE in
2004 and 2005.
Mr. Wanderscheid gave a brief overview of the conservation division. The decrease in the
Water Fund is due to the employee’s time is used more in the Electric Utility than the Water,
therefore moving some of the Personal Services to Electric. The Water Fund budget is mostly
status quo. He spoke to the progress of the division and the future. He said that they are doing
well with the goal of 20% growth in the water plan. He explained that in the future, there will
need to be an additional person in this division to help with the conservation plan. Mr.
Wanderscheid added that the conservation staff is located in the new Community Development
building and that causes higher facilities use fees in Miscellaneous Charges and Fees.
Mr. Tuneberg added that they do not see an increase in the facilities use fee for this division,
only if there were additional costs attributable to the building.
The Committee asked where the commission move to. Mr. Wanderscheid did not know and will
look into.
Mr. Wanderscheid spoke to the Electric Conservation budget. The main increase is in
Programs and is due to the Community Solar Pioneer Project. The City Council approved them
to install 60 KWH of solar electric generation. It is in coordination with federal and state
government in hopes to sell pieces of the system to community members. The Committee
asked them to clarify. Mr. Wanderscheid explained that the City would put the system out for
bid, then get the tax credit, and then sell the bonds for individual to use the tax credit.
Mr. Wanderscheid spoke to the proposed rate increase and the differences of what the
projection was in February and where they think they will actually be at the year end. They
looked at the BPA supply cost and the adjustments needed. The new data is that the BPA cost
are actually going to be $84,000 less than projected. Sales are expected to be down to $10.22
million. The reason for the loss of revenue is a mild winter. They are proposing to raise rates
10% and to eliminate the electric BPA surcharge. A true picture of what the rates will be are
going to be available in August. Mr. Wanderscheid proposed that they don’t do anything with
the rates until they really know what they will be in July or August, worst case scenario would be
2% net increase. The Committee clarified that the intent is to not eliminate the surcharge until
they know the new rates and they would happen at the same time.
The Committee asked if the excess in the Electric Fund ending fund balance can be utilized for
other functions. Mr. Tuneberg responded that Interfund loans have happened in the past and
may be needed in the future. The Committee asked if they should use it on a one time expense.
Mr. Tuneberg responded that is what the City needs to decide, and if they transfer one year for
an ongoing expense, what will they do the following year.
Mr. Tuneberg added that the $4,000 that was not included for the commission’s budget was an
input error and can be adjusted for the adopted budget. The Committee asked how the
commission funds are used. Mr. Wanderscheid responded they sponsor Earth day, world
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MAY 4, 2006 - PAGE 6 OF 6
wellness, compost classes, and have paid Ashland Sanitary for disposal of florescent bulbs. Mr.
Wanderscheid will provide detail.
Mr. Wanderscheid spoke to some of the other budget projects. He would like to implement the
Supervisory Control and Data Acquisition system. It is in the budget this year and it is their
intention to implement it. They have been installing Electric Read Transmitters (ERT) meters
and will be retro fitting meters that are not ERT. These ERT meters allow the meter reader to
be more efficient than the previous meters. They would like to purchase the Mountain Avenue
substation from Bonneville also. There would be a cost savings for distribution.
The Committee clarified that the GIS specialist is distributed in two different departments,
Electric and Public Works. Electric pays for the service to Public Works.
Everson/Hartzell ms to increase the electric conservation budget by the $4,000 for the
commission and accept the electric department budget as presented. All Ayes.
Mr. Tuneberg explained that the Committee can make their recommended revisions to the
budget in the introduction section on page 1-38.
ADJOURNMENT
The meeting was adjourned at 8.47 p.m.
Respectively Submitted,
Veronica Ward
Administrative Assistant