Loading...
HomeMy WebLinkAbout2012-04-19 Budget Committee MinutesBUDGET COMMITTEE MEETING April 19, 2012 - Page 1 of 9 CITY OF -S H LA N lam' Budget Committee Meeting Minutes April 19, 2012 6:00pm Civic Center Council Chambers, 1175 East Main Street CALL TO ORDER The Citizens Budget Committee meeting was called to order at 6:02 pm. ROLL CALL & INTRODUCTIONS Mayor John Stromberg, Committee Members David Chapman, Denise Daehler, Douglas Gentry, William Heimann, Chuck Kell, Michael Morris, David Runkel, Russ Silbiger, Dennis Slattery, Roberta Stebbins, Carol Voisin and Lynn Thompson were present. Greg Lemhouse arrived at 7:22 pm. APPROVAL OF MINUTES Approval of minutes from previous Budget Committee meetings dated: April 18, 2011 Budget Committee Meeting April 25, 2011 Budget Committee Meeting May 2, 2011 Budget Committee Meeting May 4, 2011 Budget Committee Meeting May 12, 2011 Budget Committee Meeting May 16, 2011 Budget Committee Meeting Keil/Thompson m/s to approve minutes. All Ayes. April 21, 2011 Budget Committee Meeting- Voison/Chapman m/s to approve minutes. All Ayes. February 23, 2012 Budget Committee Meeting- Runkel did not volunteer & recues himself on the Grant subcommittee. Heimann/Chapman m/s to approve minutes. All Ayes. BUDGET COMMITTEE MEETING April 19, 2012 - Page 2 of 9 REVIEW OF CALENDAR Staff went over the budget calendar presentation dates and the public hearing dates. Runkel stated he would be leaving at 6:45 pm on May 7, 2012. Leiman/Kell m/s to approve calendar. All Ayes. May 3, 2012 and May 7, 2012 leave on calendar only if needed. Move Budget wrap up to May 10, 2012. Keil/Voison m/s to approve amended calendar. All Ayes. PUBLIC INPUT Allen Sandler, 1260 Prospect, Ashland OR 97520. Mr. Sandler spoke to the story behind the origin of the parks department as it was formed as a separate commission, independent of the city council. He feels that the city of Ashland has a fiduciary relationship with the citizens of Ashland. He stated that if the Parks Budget is cut that they will be organizing a protest. Mike Gardner, 349 Orange Ave, Ashland OR 97520. Mr. Gardner spoke to the city of Ashland's history of supporting the parks, which began over 100 years ago. He feels it is an unfortunate raid of Parks funds. He urged the committee to consider the consequences of changing what has been the status quo for over 100 years. BUDGET MESSAGE Dave Kanner, City Administrator, and Lee Tuneberg, Administrative Services/Finance Director, presented the Budget Message (see attached slide). Mr. Kanner spoke to the change in the budget presentation process. There were three main points that he conveyed during the presentation. The first point is that this year's proposed budget is a balanced budget. The overall goal of a budget is not to cut or grow the budget. The second point is that the expenditures should exactly equal resources. If something is bought that means that something else cannot be bought elsewhere. The third point is that there is virtually nothing new within the budget. It is a status quo budget, a continuation of existing services and existing service levels. Mr. Kanner noted that the city of Ashland's budget is in good shape. An article was recently distributed by The McClatchy Company which talks about public sector job cuts. Over the course of the last two years there have been more than 3.9 million jobs created in the private sector but a loss of 485,000 jobs in the public sector. This is because the public sector lags the private sector in downturn and recovery by approximately 18 months. The city of Ashland has managed to survive a period of significant public sector cuts without making significant reductions in public services. The city has done this in several ways. The employees have made sacrifices. They went three years without a COLA which allowed the city to keep its personnel costs flat for 3 years. In addition, the materials and services cost have not been increasing at a rate that outstrips inflation. Stable revenue streams such as property taxes have also helped. Transient occupancy tax, franchise and utility fees and conservation have all been key contributions. (See attached slide) Mr. Tuneberg went over the proposed budget slides (see attached) & discussed the key changes within each department. The key change within the Administrative Services department is to bring back the Assistant City Administrator. BUDGET COMMITTEE MEETING April 19, 2012 - Page 3 of 9 Mr. Tuneberg went over the key changes within the departments beginning with the Legal department, which is how personnel services are used versus materials and services; this is due to a temporary Assistant City Attorney. This position is being budgeted back into the personnel services side. This is only a change in where the dollars are located. The key change within the IT department is, cuts within the Telecommunications fund. There has been a change in the business plan on the activities that are going on. The AFN budget has been trimmed by about 120K. Both public safety departments are experiencing extra dispatch due to ECSO. Increase in fuel, the remodel of the Police department and managing the Ashland Forrest Resiliency Program are all contributing factors to their budgets. Public Works has identified the additional staff needed to meet their water/wastewater requirements. It is costly to be compliant. Due to the increase in staff they will also see additional equipment and technology charges. The Street department has identified the need to reduce the amount paid to RVTD for transportation services. They also have planned for an upcoming energy audit of the cities facilities. The Water/Wastewater funds each show an increase in treatment and fuel. Community Development has seen an increase in the planning department. There is an increase of $9500 for the Certified Local Government Grant that they're managing and also the community development block grant which was brought before council. The Electric department buys their power from The Bonneville Power Administration and they have said there will be an increase of about 9% in October. There could also be another adjustment, CRAC (cost recovery adjustment clause). That could mean asking for a cost increase of a 4-5% rate increase. They are also budgeting to do another 10 year plan, currently about 8-9 years into the plan. Part of that plan is the idea to buy the North Mountain substation. Mr. Heimann spoke about the current need within the I.T. department being a good marketing director while Electric needs good management. He stated there is a vast difference between the two departments for their management needs and questions if this person exists. Mr. Kanner said what we need is a management generalist with a marketing background. The electric department can be broken down into three main functions; distribution, conservation and contract management. A Distribution manager was just hired to that piece. He would like to move all the cities conservation functions under the Assistant City Administrator to put more emphasis on that city wide. If the city had a management generalist who knows how to manage a contract they would do just fine in that role. The I.T. department has division managers who oversee the day to day functions. What is needed within that department is someone who can implement or update the AFN business plan and bring some marketing savvy to the city. He doesn't know if that person exists for that dual role nut feels we owe it to the city to try to at least fund that person. Ms. Thompson asked if we had begun looking for an Assistant City Administrator. Mr. Kanner said he has not and feels it needs to wait at least six months as he is still in a transition and learning period. Mr. Slattery asked if the position is fully funded in the budget for the entire year. Mr. Kanner stated it is fully funded in the budget. Ms. Stebbins wonders why it is fully funded in the budget if the position won't be recruited for some time. Mr. Kanner stated that is because you cannot budget position vacancies. Ms. Thompson stated that this is consistent with how we do it across the board. Mr. Keil asked if the absence will require any additional temporary services to assist. BUDGET COMMITTEE MEETING April 19, 2012 - Page 4 of 9 Mr. Kanner stated it would not. Mr. Stromberg asked where the unspent money would go. Mr. Kanner answered that it would roll over to an ending fund balance. Mr. Runkel asked what the water franchise fee is budgeted. Mr. Tuneberg stated it was still at 6%. Mr. Runkel stated that he thought he remembered seeing that the revenue estimate was projected to be a 5% increase in lodging/meals tax revenues. Mr. Tuneberg stated that he thought it was more like 34%. Mr. Runkel stated that they needed a new revenue estimate. Mr. Tuneberg said that an update was provided in February and that quarterly reports just came out so he would provide that to the council. Mr. Runkel looked at the budget book and pointed out that the increase was 3.9%, shown in the chart on page 1-8. Mr. Chapman stated that he thought he had read that last year's reduction in the franchise fee was considered temporary and was going to be restored. He questioned if that was true. Mr. Tuneberg stated that they had built the budget around the 6% transfer. They kept it at 6% for the second year but council could suggest that it go back to 8%. Mr. Chapman stated that he thought it had already been suggested by the city to go back to 8%. He questioned when that suggestion would be made. Mr. Tuneberg said that if that was decided it would be something brought to council. It was debated that given what is being done in response to the recommendations from AWAC, they felt it was not best to raise the franchise fee back to 8%. Mr. Chapman stated that it was dropped in the budget committee so he isn't sure why it would be brought before council. Mr. Stromberg stated that he thought it was important to mention what the operating budget was last year versus this year. He wanted someone to point out what those figures were. Mr. Tuneberg stated that information is displayed on 1-9 of the budget book. The increase is about 6.5% in large part due to the one time fees (in the materials and services category) associated with the grant project for thinning the watershed. Mr. Chapman stated that there seems to be a problem on page VIII. Mr. Kanner pointed out that there are replacement pages available. Mr. Tuneberg stated now that growth has been discussed and items that make up the budget that there are also things that they didn't feel could be included within the budget for various reasons. See attachment B for the add packages. He stated that budgets go up and budgets go down and that it doesn't necessarily mean they are any better or worse. There is more CIP in this budget than in the few previous years. Mr. Kanner went over three fairly major issues that he wanted to consider. He recommended that Parks be given 263K less than they requested and move those funds over to the general fund. He understands that Parks are important and that Parks are one of Ashland's defining features. His intention is to provide the facts utilizing the raw numbers. The budget gives every penny requested for operations which is 11 % more than they received in the current year. The proposed budget allocates 350K for deferred maintenance which is on top of the money that Parks receives from the food and beverage tax. Parks is getting the money that they need for basic operations and maintenance. The excess funds that Parks doesn't need totals 613K which could be spent elsewhere (see attached). The expressed tax rate equals out to $1.84 per thousand (five year average), is what parks has needed for operations and maintenance. Spoke to the long term fund BUDGET COMMITTEE MEETING April 19, 2012 - Page 5 of 9 balance from 2008 and there five year projection then. The next issue discussed is the city reserve fund which is very is important. Ashland is one of few cities who do not charge the maximum tax rate. He recommends that the maximum tax rate be charged (.09 increase) and that those funds be put into the reserve fund which would create about 183K for the reserve fund. He recommends that those funds not be spent on any ongoing expenditure which would be considered by the committee. Third issue is the near term use of the reserve fund. He stated that his previous employer, Deschutes County, was self insured for employee health benefits. During fiscal year 2008-2012 health benefits charges (premiums) to the department's increased 1.6% total. By comparison for that same five year period the city of Ashland's increase was 22% which even includes the 1 year flat premium. There is a huge potential for savings. He believes the city needs to spend the next year laying the groundwork for converting the city to a self insurance program beginning in fiscal year 2014. There will be some start up costs to do that and Mr. Kanner and Mr. Tuneberg have discussed not budgeting for those but take the money out of the existing insurance fund. They will do studies to determine what the reserve funds should be and contract services out. The savings would then be the cities not the health insurance company's profit and the city would have greater control over the structure of the program. Mr. Keil stated that the Ashland school district switched to self insurance several years ago and that the school districts costs have been essentially flat and in a couple of years even declined. He encouraged Mr. Kanner to talk to the school district regarding this. Ms. Thompson asked how the issue of self insurance is presented in this budget. Mr. Kanner stated that it isn't in the budget it is just something he would like for the committee to keep in mind. Mr. Slattery asked if this reduction is going to be a recurring plan. Mr. Kanner stated that he doesn't know and believes that a meeting of the minds needs to happen to determine how much Parks gets what it needs to run the department. Ms. Daehler asked how much is spent on total health insurance premiums each year and how much each employee's premiums cost the city after the employees 5% contribution. Mr. Kanner answered that it is approximately 3.5 million and that they would get the exact premiums to the committee. PARKS Parks and Recreation Director Don Robertson presented the Parks and Recreation Budget (see attached slides). Mr. Robertson spoke of the Sustainability Challenge which includes early adoption of Valdez principles, duck pond conversions, lighting policies, internal green team, maintenance standards, and integrated pest management policy. He discussed the 2011-2012 accomplishments which include the installation of new lights at Hunter Park, the replacement of playground equipment at Lithia Park, upgrade of irrigation at Oak Knoll golf course, another year of organic/non-synthetic pesticide use in all parks (with the exception of infields at NMP ball fields), removal of unsafe skate park at Garfield Park, allowing dogs on leash in most parks along paved areas, trail easement approved and built at Ashland Christian Fellowship Church, Upper Clay Street property acquisition, Ashland Creek property acquisition (future trail linkage), hiring of a new Recreation Coordinator, facility partnerships and new volunteer opportunities. The volunteer park host, trail host, ice rink host and pool host programs have been very successful and meaningful programs. 98% of Ashland citizens say they have visited a park within one year. These value added services help form people's opinions. Mr. Robertson presented the Trends Over Time Buy and Build years (1990-2004) which include land purchases, BUDGET COMMITTEE MEETING April 19, 2012 - Page 6 of 9 park developments, run up to 29 FT maintenance employees, internal construction, emphasis on construction, recreation was a low priority, assumed increase in tax rate. Mr. Robertson went over the Trends Over Time Adjustment/Transition years (2004-2013) which includes a change of staff leadership, more contracted services, zone maintenance, and move away from specialized employees, reduce labor force from 29 to 20 FT maintenance workers, customer/demographic driven recreation programs, annual financial evaluations, fiscal stability. Ms. Thompson asked why the charges for services represent a significant decline in revenue (page 4-84). Mr. Robertson explained that the Parks department is no longer doing school district maintenance as of 2012-2013. Ms. Thompson stated that the trend actual charges for actual shows lower revenues. Mr. Robertson said it isn't about how much money you are making or spending but rather how you are managing the gap in between. Mr. Robertson went over the Trends Over Time Rehabilitation and Renewal years (2013 to future) which include a need to protect investment, need to prepare for future residents and need to enhance our balanced fiscal stability. Mr. Robertson spoke of the Recreation budget. He stated that last year the volunteer coordinator position was fully funded out of the maintenance area and this year they are shifting half of it to the recreation area. Last year it was done that way because the primary objective for that position was to get the integrated pest management program up and going as far as the volunteer efforts to offset those challenges there. They also knew that the position would transition over to special event programs and management. He spoke of the other piece they have included in there which is the Ashland Youth Conservation Core. This program targets the 8-10th grade kids within the community. They help provide services and also learn at the same time. Mr. Robertson introduced the new Parks Superintendant, Bruce Dickens. He is doing a great job of managing overall, developing parks standards and replacing retiring employees. Mr. Robertson spoke of the deferred maintenance items such as the Senior Center sidewalk which is in bad condition. The Calle Guanajuato is also in need of maintenance. Last year there was a bad trip and fall, 2 ladies were injured and resulted in a15K injury claim. They have made some repairs but a complete resurface is needed. The Utility trench has sunken an inch to two inches in some spots. It is a daily potential tripping risk. Lithia Park is living to the ends of its lifetime. The commission has identified a project that it wants to move into next year but there are some maintenance items that cannot wait for that plan such as the Lithia Park Enders Shelter and the Lithia Park Bridge. PUBLIC INPUT Joanne Egars, 221 Granite St Ashland, OR 97520, Chairperson for Parks commission Ms. Edgars addressed the council. She stated that the city budget process has not worked well. The Parks commission will be asking to meet to outline the budget process that works for both bodies and provides for better communication. Ms. Egars believes we owe it to citizens who have high expectations of their parks and recreation programs. BUDGET COMMITTEE MEETING April 19, 2012 - Page 7 of 9 Rich Rosenthall, Parks and Recreation commission member Mr. Rosenthall recognizes that the budget is a difficult task. Every community strives to attract tourists, increase property values, reduce crime & influence the quality of life. He believes there is only one department that can do all those things. A robust and well funded Parks and Recreation department is an investment in the community. He believes a discussion needs to be had regarding what the Parks system should look like and how it will be funded with the community going forward. Jim Lewis, Parks Commissioner, 640 A Street Ashland, OR 97520 In his 26 years as volunteering for the city he has learned a lot about the history of the city of Ashland. He stated that parks are a key component of the history. This is the first time in over a hundred years that Parks funding is moving to the general fund. He thinks the council is fully funding the Parks in the front door and draining resources out the back door to fund extraneous expenses. His point is that if you think Ashland is special preserve it. Steph Sevenger, member of the parks commission, 448 Taylor Ashland, OR 97520 Ms. Sevenger and her husband lived here in the 1970's. One of the reasons they decided to move back was Lithia pars. Ms. Sevenger hopes that the communication between the parks department and the council becomes more important. The parks create a vast amount of mental health for the community. Mr. Slattery asked what Parks would do with that extra 263K. Mr. Robertson stated they would tackle more deferred maintenance and improvements. Also due to time constraints some of the work would need to be contracted out so those funds would pay for the contract work. Mr. Lemhouse spoke to the deferred maintenance and questioned why there was still an ending fund balance the last two years when deferred maintenance was an issue then too. He questioned if time was an issue then as well. Mr. Robertson said yes that was the issue then. At times they want to achieve more than time allows. Mr. Lemhouse stated that the Parks department is consistently under budget so what is the justification for the greater amount in this budget? Mr. Robertson said it is because some of these items simply can no longer wait. It is a reprioritization. Ms. Thompson spoke to the Parks budget in relation to the city's budget is an increase of over 11% from last year, in the previous year it was an increase of 15%. The city has been curtailing the expenses while the Parks department has been increasing its budget. She asked what the reason is for the increase. Mr. Robertson stated a large chunk of it is the transfers out of the general fund and into the city's general fund. The primary difference is 263K which contributes significantly to the I I% increase. Mr. Chapman noted that he saw the difference in the Personnel Services. Both the City and the Parks department had a 6.5% health budget increase. The Cities overall including new hires was a 5.5% increase in Personnel services and the Parks department was 11-12% increase. He questioned why that is. Mr. Robertson answered by stating that the employees group went from being a non represented group to being unionized and then decertified the union. They came in and talked to the commission and the commission stated that they really wanted them, Don BUDGET COMMITTEE MEETING April 19, 2012 - Page 8 of 9 Robertson, to sit down with the employees group and work with the Personnel department and identify where the deficiencies are. One of the things that the commission had done with the employees group is said that they would receive a COLA increase. So this budget has a budgeted 2.75% COLA increase in it. The other issue was within the Recreation area. When the budget was approved last year it had an error in the benefits side (about 40K). If you discount out that error the difference isn't as high as it appears to be. They also had a significant turnover within the department and held that position vacant to help balance things out. They also had less than ideal conditions on the ice rink which meant lower staff on the days that the ice rink was closed. Ms. Daehler asked if the repairs are done in house. Mr. Robertson said they are no longer done in house and most of the work would be contracted out. Ms. Daehler noted that by contracting the work out that the work should be completed quicker. She asked what the time frame is for the 2.2 million in repairs. Mr. Robertson said it depends on how much they receive each year. They have determined that safety and preserving the endangered amenities are the highest priority. Mr. Keil asked what other options are being looked at for funding. He questioned whether the Parks department has thought about asking the commission to bond any of it. Mr. Robertson stated that they had a similar discussion a few years ago with the commission. The commission has also been wrestling with the idea of leveraging the food/beverage tax. Ms. Thompson noted that page 3-145, line item 602 (Rental, Repair and maintenance) shows a significant increase and questioned if that was due to the shift in internal work to contracted work. Mr. Robertson acknowledged that was the reason for the increase and stated that some of it is additional day labor in addition to the highly skilled labor. Ms. Thompson noted that there is about 800K shown there, 2 million funded in the CIP budget and there is about 630K for Capital Outlay projects shown on 3-141, line 700. Mr. Robertson stated that page 3-141 shows that 595K of the 630K is being transferred to the Parks CIP fund which covers some of the deferred maintenance and the need to replace some of the equipment which has been determined by the cities shops. Ms. Thompson asked if the 809K shown on 3-145 is in addition to that. Mr. Robertson stated that was correct. Mr. Runkel asked how much coordination is there with the city in regards to the COLA increases. Mr. Robertson said that the commission has the authority to set the COLA. The Parks department employees have not received a COLA increase since 2008. He believes that the city has also budgeted for some COLA's. The Parks commission bases the COLA strictly on the consumer price index and not on what the city gives. Mr. Chapman noted that the Atkinson bridge repairs were not on the CIP. Mr. Robertson stated that there are actually two CIP's. One is the CIP housed in the Public Works budget which is funded by the food and beverage tax and system development charges. The other is the CIP within the Parks budget which is funded through transfers. Mr. Chapman also pointed out that there must have been an error on the Parks CIP for FYI 2. Mr. Robertson stated that there was (revised page available). BUDGET COMMITTEE MEETING April 19, 2012 - Page 9 of 9 Mr. Slattery spoke to not wanting anyone to leave with an unsettled feeling and it sounds like there is enough of a budget to keep the Parks department running the way that the Parks department always has. He stated that there has been a breakdown in communication on sides, the Parks department and Council. Mr. Robertson said that the breakdown in communication is nobody's fault. The budget meeting that usually takes place in November never occurred for whatever reason but that it is necessary to have that meeting going forward. Mr. Slattery apologized personally to Mr. Robertson. Mr. Robertson hopes that everyone can walk away with a better understanding of where everyone is coming from and everyone makes the commitment to have the discussion going forward. Mr. Silbiger noted that there never was a mandate for unlimited funds back in the early years. It is hard task for the committee to consider what departments the funds should go to. Mr. Silbiger noted it seemed like the Parks department had found a cheaper way of doing the irrigation improvements. Mr. Robertson stated that they had indeed hired some great people who had found a way to reconfigure things which saved them a lot of money. Mr. Silbiger noted that he was confused regarding the lower Clay Street purchase and the repayment of it. He stated that maybe that is a question for Administration. Mr. Silbiger also requested that the revised Parks CIP be distributed to the committee. ADJOURNMENT The Budget Committee Meeting adjourned at 9:14 p.m. Respectfully submitted, Tami De Mille -Campos Administrative Assistant