HomeMy WebLinkAbout2019-04-17 Budget Committee MinutesBudget Committee Meeting
April 17, 2019
Page 1 of 10
BUDGET COMMITTEE MEETING
MINUTES
April 17, 2019
Council Chambers
1175 E. Main Street
Mayor Stromberg called the meeting to order at 6:02 p.m. in the Civic Center Council Chambers.
ROLL CALL
Present:
David Runkel
Jim Bachman
Paula Hyatt
John Stromberg
Shaun Moran
Mike Morris
Stephen Jensen
Absent: Julie Akins
Stefani Seffinger
Dennis Slattery
Tonya Graham
Rich Rosenthal
Shane Hunter
Pamela Lucas
PUBLIC INPUT
Hulez Gutchen- Ashland- Spoke to the measurement of carbons, kilowatt hours and dollars. He
stated that looking at these items tells us what we should do in regards to climate change.
CALL FOR NOMINATIONS FOR BUDGET CHAIR AND VICE CHAIR
Mayor Stromberg noted information regarding the Rules of the Budget Committee, as created
during the Budget Ad Hoc Committee meetings and that these would be passed out during the
meeting.
Jensen/Slattery motioned/seconded the nomination of Paula Hyatt as Budget Committee Chair.
Discussion: None. Vote by Hand: All Ayes. Motion passed unanimously.
Lucas/Rosenthal motioned/seconded the nomination Shane Hunter as Budget Committee Vice
Chair. Discussion: None. Vote by Hand: All Ayes. Motion passed unanimously.
BUDGET
Mark Welch, Administrative Services/Finance Director began by thanking the Committee for their
participation during this process. He went on to note that this meeting will be focused on three
sections, the traditional budget message, a review of assumptions, and a summary of how the
proposed budget will be balanced. Questions were requested to be held to the end of each
presented section.
Welch started by stating that the decisions made for this proposal were hard and included issues
that were both foreseen and unforeseen including smoke issues and lack of development and
growth within the tourism economy. The cost of personnel was also listed as a concern as it
includes full time employee salaries, healthcare and PERS. He added that although some of these
issues have been addressed the proposed budget adds additional measures. Additionally, noted
as a concern was the general fund deficit that was adopted in the last budget cycle and the money
that was moved to insure that no cuts were made during the last biennium.
m"WOM
CITY OF
ASH LAN D
M
� Thanks to everyone on the Budget Committee
10 dill -0 1 =33
M
I Ak
HUM2112�410M
� Tourist Economy and its impact on revenue sourcel
� Central Service use of one time money
m"WOM
CITY OF
ASH LAN D
M
Tourist Economy
� The City has experienced summer smoke events
I
� Impact to Food and Beverage Tag
M IIMIIIIIMIM�
adjustments if needed, i.e. timing/scheduling of capital projects
m"WOM
CITY OF
ASH LAN D
M
lwi////////0000/
CITY OF
ASH LAN D
M
� i 1111l;i�p� 1 'Ili i l
� Two positions approved in the BN 17-19 Budget were
eliminated during the biennium and were not re -
Mal I I H MW
$35,182,323
19, 963, 748
$37,720,605
i////////0000/
CITY OF
ASH LAN D
$41,085,868 $43,424,562 $5,703,957 15%
21,412,200 26,517,173 30,733,779
9,321,579 44%
$55,146,070 $59,132,805 $67,603,041 $74,158,341 $15,025,536 25%
The 15% consist of COLAs, Step Increases, New Labor
Contract Costing NOTE:
Change is BN
Benefits increase is largely due to an increase in PERS Number not Annual.
(25% increase over budget) and Healthcare (10% over 15% is roughly 7%/year
Budget)
lwi////////0000/
CITY OF
ASH LAN D
M
Projected Cost of Living Wage Adjustments
(contractually obligated - except Non -Rep)
3% 3%
2%
2%
3%
3%
2%
2%
2.5%
2.5%
2%
2%
2%
2%
Regular Employees
BN 2013/15 Actual
$ 31,352,712
lwi////////0000/
CITY OF
ASH LAN D
M
BN 2015/17 Actual BN 2017/19 Amended BN 2017/19 BN Actual BN 2019/21 Proposed
Budget Estimate Budget
$ 33,321,300
Total $ 31,352,712 $ 33,321,300
$ 36,161,995
$ 36,161,995
$ 35,848,429
$ 35,848,429
$ 38,942,288
$ 38,942,288
lw�
CITY OF
ASH LAN D
Public Employee Retirement System (PERS)
Unfunded Actuarial Liability (UAL)
13.24% 19.49% 7.21% 11.84%
11.81% 11.81% 11.81% 11.81%
25.05% 31.30% 19.02% 23.65%
lw�
CITY OF
ASH LAN D
Public Employee Retirement System (PERS)
I I We analyzed what this meant to all current employees
$4,982,876 $5,269,254 11.47% 11.81% 23.28%
i////////0000/
CITY OF
ASH LAN D
IM
CITY OF
Healthcare Changes ASH LAN D
IM
INUMNSHUMMEW0111
Avoided $1.5 million for 18-months
Grandfathered plan ends January 2020 (Police and Fire January
2022)
First 6-months of the plan, City saved a real $900,000 versus being
self -funded
City built a reserve fund to mitigate future rate increase
I I Estimated balance to be $800,000 at end of the year
I I New plan shifts the cost of the benefits to employee
I I Lower cost to the City
IM
CITY OF
ASH LAN D
IM
BN 1 /15
BN 2015/17
BN 1 /1
1 /1
1/ 1
Actualt
ActualAmended BN
Budget
Estimate
Budget
Group Health
$ 7,501,264
$ 9,174,782
$ 10,976,822
$ 10,882,944
$ 12,808,590
Insurance
Total
$ 7,501,264
$ 9,174,782
$ 10,976,822
$ 10,882,944
$ 12,808,590
IM
CITY OF
ASH LAN D
IM
In order to carry out City operations, the City must purchase materials
and services
� • increases to line items were
I I Central Service Charges
I I Equipment Replacement Charges
• 11MIUMI lisim"mgusrmyel�* 1�22 1111
=Kip,
Im
TY OF
Materials and Services
ASH LAND
Im
$2,492,561
$2,570,817
$3,044,324
$2,523,448
($520,876)
-17%
6,428,260
7,492,412
9,546,882
10,347,914
$801,032
8%
836,252
860,459
1,046,289
1,150,291
$104,002
10%
15,841,885
17,758,650
23,061,829
20,384,758
($2,677,071)
-12%
22,330,201
23,958,782
25,263,737
29,352,021
$4,088,284
16%
15,475,638
16,483,778
18,739,019
19,719,843
$980,824
5%
4,202,318
4,682,638
5,408,821
5,729,492
$320,671
6%
9,397,413
11,088,914
12,705,725
14,466,203
$1,760,478
14%
24,730
19,528
28,642
17,742
($10, 900)
-38%
1,826,078
1,989,748
2,259,745
2,178,049
($81,696)
-4%
1,298,668
1,320, 760
1,572,254
1,629,442
$57,188
4%
$80,154,004
$88,226,487
$102,677,267
$107,499,203
$4,821,936
57o
Im
TY OF
Materials and Service
ASH LAND
Im
City completed a new Cost Allocation Plan
$12,028,530 $12,949,788 $13,570,242 $16,631,969 $3,061,727
1,926,887 2,424,010 2,420,718 3,044,594 623,876
$13,955,417 $15,373,798 $15,990,960 $19,676,563 $3,685,603
23%
26%
23%
The City adopted -y ar plan, with an emphasis on the current
biennium and two following biennium budget cycles
The budget implements the Capital Improvement Ian I)
$5,303 $358,529 $0
3,223,599 2,995,931 3,687,905
11,236,057 8,204,262 65,342,662
$14,464,959 $11,558,722 $69,030,567
$150,000 $150,000 -
5,094,000 1,406,095 38%
52,304,425-13,038,237 -20%
$57,548,425 ($11,482,142) -17%
$9,220,536 $8,686,005
IM
CITY OF
ASH LAN D
i�Tr,iajor Revenue Assumptions
9EHOWIM
IBIN 2013/1.5 ACtUal IBIN 201.5fi7 ACtIL,Iall IBN 2017119 B N 2017/19 BN IB N 2019/21
Amendied Budgiet Actual Estimate Piro posed IB IL,idget
IM
CITY OF
ASH LAN D
City TOT rate increased from 9% to 1 Oho
Equates to an 1 1 % increase in the collections rate
`« growth
1: 2017 (July-Sept):growth
: 2017 (Oct -Dec): % increase
: 2018 (Jan -April): % increase
: 2018 (April -June): % increase
Im
CITY OF
ASH LAN D
Im
2%
7%
5%
$212,878
$218,976
$190,000
$195,738
$5,738
3%
55,831
55,210
55,000
55,828
828
2%
2,763,095
2,961,262
3,250,220
3,464,132
213,912
7%
599,780
629,226
650,000
679,543
29,543
5%
360,795
377,015
378,000
403,104
25,104
7%
248,581
227,861
270,000
216,000
-54,000
-20%
729,999
865,659
1,260,560
1,357,920
97,360
8%
709,765
856,285
948,250
907,440
-40,810
-4%
$5,680,725
$6,191,493
$7,002,030
$7,279,704
$277,674
47o
Range from Parks charges, Ambulance Transportation, to charges for utility usage.
Proposed Rate increases (consistent with Master Plans and Rate Models):
Water/Wastewater current being evaluated
Electric rates to be reviewed in the BN 2019/21
3.65%
4%
4%
3%
3%
Where the Money Comes From
$38,079,780
43,1 10,775
7,112,730
56,146,312
1,660,300
12,260,396
123,276,908
857,900
1,305,564
1,050,000
482,850
4,047, 791
$289,391,306
43,089,944
48,278,524
7,389,704
49,465,124
1,898,300
12,407,205
131,441,862
1,210,800
2,370,095
0
1,561,317
2,074,828
$301,187, 702
Im
CITY OF
ASH LAN D
Im
13%
12%
4%
-12%
14%
1%
7%
41%
82%
-100%
223%
-49%
4%
Where the Money Goes
IN
CITY OF
ASH LAN D
Im
BN 2017/19
BN 2019/21
Amended
Proposed
Change
Budget
Budget
39,978,998
23,902,266
-40%
26,984,213
23,177,704
-14%
7,459,880
7,412,073
-1 %
409,032
375,849
-8%
5,859,741
6,183,809
6%
15,258,125
16,889,886
1 1 %
19,866,282
19,905,049
0%
120,529,194
99,006,234
-18%
19,795,277
20,306,875
3%
33,140,564
35,902,724
8%
$289,281,306
$253,062,469
-13%
*Including the Supplemental Budget of 3 Police Officer change is 1.8%
Im
(2,050,239)
How did we get here:
I I Utilized General Fund Ending Fund Balance
BN 2017/19 Budget included $850,000/year of Facilities
and (CIP) to balance Central Services
PROOF!
11M
CITY OF
ASH LAN D
IN
11111111giiiiiii Iiiiiiii; 11,11 1
iiiiiiiiiiii lillim0wreRUNEW —2 ME
� Parks • no • receive $2.09 • the property tax but $1.E1
2 in the Police Department
1 in Community Development
1 in Administration
1 in Courts
1 in Administrative Services
11W
CITY OF
ASH LAN D
IN
� Expand the Staffing model for the Fire Department
I I Currently at 10 Firefighters Maximum and 9 Minimum
I • Window to 10 Maximum and 8 Minimum
11 $100,000 General Fund Saving through reduced Overtime
i0i
11W
CITY OF
ASH LAN D
IN
UNSWIM.
The Building Department service to specific customers does not provide a
public benefit
I I Increasing fees would improve cost recovery
� SRI 0=8 8
M-9 U1111 �--
� Keep Local Marijuana Tax in the General Fund
11M
CITY OF
Revenue Enhancement ASH LAN D
IN
The AFIR Fee has generated over $10 million in grant money back to the City for
AFIR programs
I I Increase would pay for the increase in the program costs
�, �80 11WO
� Revenue Enhancements $497,69].*&
Offsetting Revenue and Expenses
Increase Public Safety Support by $5 (to $6.50) to fund 3
Firefighters
11 3 Firefighters were added 2.5 years ago
lim
CITY OF
ASH LAN D
IN
Other Options to Explore
(not in proposed budget)
rawwlz"*lramrolu�
The Property Tax increase and TOT did not materialize to fund the
additions but used to maintain current level of service
Reduce/Eliminate the Economic, Culture, Tourism, Sustainability (ECTS)
unrestricted funds ($150,000) to fund a full-time position
Reduce/Eliminate the Social Service Grants ($164,000) to fund a full-time
position
Increase Food and Beverage Tax to 7%, dedicating 2% to the General Fund:
$1,200,000
Increase Property Tax to the maximum allowed: $150,000
Increase Water and Wastewater Franchise Fees: $300,000
Implement a Live Entertainment Ticket Tax: $200,000-$300,000
Meter Pioneer Parking Lot: Net $60,000
11W
CITY OF
ASH LAN D
IN
lim
CITY OF
Other Options to Explore 't) ASHLAND
(con
(not in proposed budget) N
in M* �MIIMI
MWM =-- .1 1
Would provide a 5 year sustainable budget, before needing
voter approval torn w
mm i
rolffolm-
11W
CITY OF
ASH LAN D
IN
I Charts have been expanded to show more line item detaill
Budget Message and General Fund Balancing Proposal
Fund Narrative
Department Narrative
Long Range Financial Plans
Appropriation Levels
It also provides interactive s
onlineThe s developed to show the future
of Government Budgeting
allowsThe tool the Cityi site explain
typesthe budget to all of citizens ranging from those
cursorywho want information s
exploress amounts of data and become
Ashlandx s
Budget Committee Meeting
April 17, 2019
Page 2 of 10
Welch went on to speak about the tourism economy reiterating smoke events and speaking to
the funding source identified for Police funding. For Police funding the Transient Occupancy Tax
was raised, including using part of unrestricted funds. Welch however noted unrestricted funds
were ultimately used to stabilize the general fund for the current fiscal year. The increase in
Transient Occupancy Tax equates to a forecasted reduction of collections, he added. Also
explained by Welch was a decrease in the Food and Beverage Tax with revenues being down,
with stabilization and a predicated decrease overall. He added that the Transient Occupancy Tax
is used for general fund operations while the Food and Beverage Tax is used for Wastewater
Debt and future Capital Improvement Projects and Parks.
Looking at expenses Welch communicated that the proposed budget did not include adding any
new positions, including in the enterprise funds. Additionally, Welch added that six full time
positions would be eliminated as part of the proposal, as these can be maintained and keep the
general fund balanced. He added that two positions, unfilled from the last biennium were not
budgeted for in the proposed budget, thus bringing the total eliminated positions to eight. Welch
commented that even with these eliminations increases in personnel services are still predicted.
This includes regular salary increases in COLA's, step increases, new labor contracts, and fringe
benefits which are built into the budget. The largest expected costs within fringe benefits was
noted as PERS. Welch explained that the PERS rate is not only related to the normal costs for
current positions retirement benefits, but also relates to an unfunded liability in relation to the
PERS costs associated with past employees and current employees from which not enough was
collected from. In this proposed budget he added that more was being paid in the unfunded liability
then in the normal costs, with an overall increase in total PERS costs.
Another change correlating to personnel expenses was the cost of healthcare. Welch explained
that the City moved from being self -funded during the current biennium. This was due to the large
unbudgeted anticipated increases within the program. The fully insured plan that the City moved
to was estimated to save the City funds, with a current guaranteed lock on premiums. The
grandfather plan which was guaranteed for the first eighteen months of the plan ends in January
of 2020. When this occurs employee benefits costs will be shifted to the employee with these
overall costs increasing slightly. Welch added that a benefit of leaving a self -funded insurance
was that an increase kept in place from the last biennium created funds that were added to the
health benefit reserve fund. This was originally done to help mitigate future rate increases to
healthcare. The proposed budget notes an overall increase in healthcare, with the total
percentage being higher for police and fire.
Welch explained that departments were directed to see what costs could come in below or at
previous totals for materials and services. With this the proposed costs of materials and services
was down removing costs associated with insurance and internal fees. Costs such as insurance
and internal fees used to pay into central services were also noted as costs that cannot always
be controlled by departments. Equipment replacement charges have also been reviewed to allow
for adequate maintenance and replacement Welch added.
Welch also described the new Cost Allocation Plan which is now recognized as a federally legal
documents will be implemented into the proposed budget and fully phased in the next six years.
This new plan helped to allow for the Central Service to have a sustainable funding model. He
also spoke to the overall equipment replacement plan, noting that it needed to be updated and
decisions need to be based on the maintenance, replacing them only as needed and taking into
consideration that vehicles also become more expensive.
Budget Committee Meeting
April 17, 2019
Page 3 of 10
Also communicated by Welch was information regarding the Capital Improvement's Plan, as
recently adopted by Council. It was explained that when issues are addressed early that it
becomes the lowest cost to rate and tax payers, as projects only become more expensive if
delayed. Also added was that the total cost listed is in Welch's opinion are a realistic number to
be completed.
Welch spoke to the debt obligations of the City adding the City has not taken on much debt in
recent years. The numbers regarding debt he noted in the proposed budget were from payoff and
other costs related to current debt.
Beginning by noting that there is no recommendation to increase the Property Tax Levy, Welch
went on to communicate to the committee about revenues. Including an increase in the Property
Tax in relation to assessed value and a stable collection rate as with previous years. Welch also
explained again that revenues related to the Transient Occupancy Tax are projected to decrease.
This does include an increase in the shoulder seasons. Another major revenue source listed was
Franchise Fees in the general fund for the utilities. This fee is expected to have a positive growth
in the line item, Welch added. There was a decrease noted for Wastewater fees within Franchise
Fees due to calculations. Welch also added that Citizens being charged for the use of services
was also considered a revenue. This includes Parks recreation services, ambulance transports
and building fees. Other fees expected to increase include electric fees that are due to an increase
in BPA fees, Water and Wastewater fees as scheduled in the master plans and lastly Streets and
Stormwater. Welch showed the committee a slide that included were the funding came from and
explained that the city does currently have an ending fund balance that will be carried forward as
a resource in current biennium budget. Overall the resources are up by 4% but requirements are
down by 13% mainly due to Capital Projects.
Mayor Stromberg began the question portion of the presentation by stating that was the best
presentation he has seen as Mayor. Shane Hunter, Budget Committee Vice Chair asked for
clarification on where the money comes from in relation to the ending fund balance and if this is
expected to be used or saved. Welch explained that it is a combination with money being used in
terms of Water to build reserves for the Water Treatment Plant. Models show that this total amount
will be reduced as it is spent and the Water Treatment Plant is completed. Welch also explained
that you will end up seeing a line item that balances this fund amount, as resources equal to
requirements. Councilor Slattery, asked if utility increases were pass through increases with no
additional fees being added. Welch responded that that was correct and that no additional fees
will be added, with increases being due to overall increased rates. Slattery also asked for more
explanation on the return of services going up by 5% and how internal services rose. Welch
explained that this was due to the one-time money that had to be funded and the rising costs of
operations, even with the cost of reduced personnel. Hunter, also questioned the Capital
Improvement projects at 57 million dollars, as this was a lot of activity. Welch when on to answer
that the CIP was made with a realistic estimate of what could happen. David Runkel, Committee
Member asked about the two positions that had already been eliminated and where these were
at. Welch answered that these were both in the Information Technology Department. Runkel also
asked about details regarding the Public Safety Support Fee for the Fire Department. Welch
responded that this would be discussed in the next section of the presentation. Shaun Moran,
Committee Member began by asking to the title of budget that stated that it was amended and
that he was not aware that the budget had been amended. He also asked as to why the amended
budget would be used as opposed to the original budget. Welch responded that the amended
budget included the original budget and any supplemental budgets. Moran questioned the amount
of supplement budgets that had taken place and if the original adopted budget would be
Budget Committee Meeting
April 17, 2019
Page 4 of 10
represented. He also noted that this could be problematic as it did not give a picture of what was
previously adopted. Welch suggested that he look with Moran in OpenGov for the original budget
and the amended changes and how this is incorporated into the budget. Mayor Stromberg added
that the supplemental budgets allow the City to receive grants. Moran responded that overall this
would be useful as reference. Moran also asked about restricted and unrestricted funds, he
explained that out the 50 million dollars he understood that 30 million was planned for but
questioned where the unrestricted 20 million would show up in the proposed budget. Welch
responded by stating that this was in the long term plan with funds collected from a use of service
not be allowed to go to general fund. Welch added that other areas of unrestricted funds include
Cemetery Trust Fund, Health Benefits Fund with reserves in the equipment fund. Councilor
Graham asked in regards to the CIP Project listed for 2017-19 biennium and if the similar projects
listed in 2019-21 were unfished in 2017-19 biennium and put in the wrong time frame. Welch
responded that this was correct. Graham questioned further that if once major spending on these
projects were completed if it was realistic that the amount would be decreased to previous years'
amounts. Welch stated that it is expected that once the Water Treatment Plant has been
completed that the total amount should be close to 7 or 8 million. Councilor Jensen asked
regarding the methodology in the internal service fees. Welch explained that this information is in
a large spreadsheet which uses measures such as the amount of checks processed against each
department contribution. He also explained that other departments that are impacted by receiving
Internal Services Fees include engineering and GIS. Jensen also asked if these charges are
calculated by an industry standard. Welch responded that they are. Jensen also questioned if the
franchise fees that the enterprise funds pay are similar to internal charges. It was explained that
they were different in that those funds in Central Services have an impact on operations. Slattery
noted that this is similar to overhead.
Welch begin the General Fund Balancing portion of the presentation by stating that it is widely
known the general fund balance was in a deficit. It was at the direction of City Council that he was
directed to eliminate this deficit. If the budget, he noted is adopted as presented it will be
sustainable for the next 6 years. Mayor Stromberg asked what assumptions would be made in
regards to this suitability and the impact of PERS. Welch added that this does include
assumptions about PERS, healthcare increases, an increase in tourism economy, and property
tax revenue. He also added that no new positions and no new programs could be added either.
Speaking only to the general fund Welch noted that there is an estimated $2,050,239 structural
deficit. Welch went on to explain that this was due to the deficit in 2017-19 budget in which
$850,000 per year was used from the Facilities Fund in Cl P to balance Central Services. Charges
that would have been incurred by the by the General Fund were then covered by this balance.
Welch also noted that PERS and healthcare also added to the increase in General Fund. In
addition, he explained that the ending fund balance was over $4,000,000 which could be used to
plug the numbers but would leave the City with no reserves.
Welch went on to speak to how it was proposed to structurally balance the budget, with the first
task being to cut expenses. The first expense listed to be cut was the contribution to Parks, from
$2.09 to $1.89 per assessed value of property taxes. Also noted was an elimination of positions
with two being from Police, one from Community Development, one from Administration, one in
Courts, and one in Administrative Services. Between these two proposals $530,000 is saved from
the General Fund. Also discussed was opening up the staffing window for the Fire Department.
Welch noted that this will have an impact on services but that it is proposed to move from a
maximum of 10 and minimum of 9 to a maximum of 10 and a minimum of 8. With the allowances
being given to maintain at 10 staffing during the fire season. This will incur a $100,000 general
Budget Committee Meeting
April 17, 2019
Page 5 of 10
fund savings reduction. He reiterated that as previously stated by the Fire Chief that having a 9
staffing will allow for a lower impact to the level of service, but with the cost savings and the ability
to raise staffing during fire season that some risk could be mitigated.
The revenue enhancements also proposed with the budget by Welch include, increasing building
fees as the service does not provide a public benefit. These fees would not impact the general
public only those using the services for a specific project. Also included in the proposed budget
revenue enhancements are the use of reserves in the health benefits fund. It was added by Welch
that this fund had been created to mitigate future rate increases, and in the proposed budget this
would be justified to be added to the general fund. Welch explained that the previous funds
transferred to the affordable housing trust fund form the marijuana tax are set not be transferred.
It was added that this does not mean that City would go away from having the affordable housing
trust fund, but that the selling of surplus property at such locations as Clay Street, would be used
to fund the program.
Welch went on to add that the increase of the fee for the Ashland Forest Reliance is also a
consideration in the proposed budget. This fee has in the past been used to fund grants and work
in the Watershed Areas of the City. This increase in the fee would go to help support the ongoing
costs of the program.
Overall the revenue enhancements would generate a little under $500,000 toward funding the
general fund deficit.
Knowing that the City needs to be on a long-term sustainable path, and needs to allow for no
structural budget deficits, other options were also discussed. The first of which was the addition
of three firefighter positions, a little over two years ago which help lead to the 1.25 milliondollar
deficit in the last budget cycle. The costs of these positions along with overtime costs the City
over $200,000 a year. Knowing this Welch added that they had to look at how to raise enough to
cover the costs of these position expenses. In relation to this the staffing window was looked at,
but Welch explained that if this was implemented would add a risk to the community and if these
positions were eliminated the would create no chance to increase staffing when needed during
fire season. Welch added that as previously demonstrated by the Fire Chief that having staffing
closer to nine is better for fire operations. With this he added that in the proposed budget there
was an increase of the Public Safety Support Fee from $1.50 to $6.50 in order to fund the three
firefighter positions.
With these overall offsetting revenue and expenses of $600,000 and the previous mentioned
revenue enhancements the budget would be balanced and no carryover would be needed,
assuming no new positions or programs being added the budget would be sustainable for the
next six years.
Other funding options not included in the proposed budget that Welch explained included first an
increase in the public safety fee by $2.00 to fund the proposed eliminated positions of Police
Officers. He further explained that the lack of these two positions creates less than optimal
situations for employees with these proposed eliminations. The School Resource Officer is a
position that within this, that is important. Welch also added that further conversations are needed
with the school district to discuss funding. Additionally, added was reducing or eliminating the
Economic, Cultural, Tourism and Suitability and the Social Service Grants in unrestricted funds,
as this could be an option to fund personnel. Long term funding options looked at are an increase
in the Food and Beverage tax with 2% being dedicated to the general fund, an increase in the
Budget Committee Meeting
April 17, 2019
Page 6 of 10
property tax, increasing Water and Wastewater Franchise fees to both being 10%, a Live
Entertainment Ticket Tax and metering Pioneer parking lot.
The last options looked at for funding was developing a plan to ask voters to fund an Operating
Levy. The State of Oregon Welch noted allows for 5 year operating levies with an increase in the
property tax. The earliest that funds could be voted on would be November 2020. This levy could
replace all or some of the utility fees.
Slattery began the question portion of the presentation by clarifying what the total deficit would be
before revenue enhancements, not adding fees or increasing taxes. Welch explained that by just
reducing expenses that the total would be just over 1.1 million dollars. He also added that some
of the revenue enhancements listed such as increasing building fees, use of the health benefits
fund, the non -transfer of the marijuana funds will have no impact on residents, but fees like the
AFR fee would be added to a utility bill. Welch added the majority of the balancing proposal in
revenue enhancements do not have an impact on fees and taxes of the general resident.
Moran stated that he was concerned that with the proposed revenue enhancements and that this
would cause the City to slip back to their old ways and add to the addiction of spending. He
followed up on Slattery's comments by noting that the additional fees would have an impact on
those wanting to build in the City, adding that this could make it cost prohibited. He added that he
felt it was time to think out of the box, so that people would be attracted to live, build, invest and
raise children in Ashland. And that if this does not happen we are doomed. Overall he would like
to see a way to not increase fees and cutting spending.
Councilor Rosenthal added that it was mentioned that the budget as proposed will continue
departmental operations, but from what he has seen there would be a changes in the levels of
services from what is currently given. He added that with a department such as Fire potentially
seeing this change in service and if they would be able to speak to the impacts that this would
have on their department. Welch added that they would. Rosenthal also asked in regards to the
credit card fees paid by the City and if this could be looked at. Welch explained that these fees
are mostly in the Utility Billing Department and that a change in these fees would cause a
reduction in the cost of providing a service to departments already creating a profit. He also added
that this would help the Central Service Fund more than General Fund. He also reiterated that
General Fund consist of three departments including Community Development, Police and Fire,
as the major expenses of this fund.
Graham begin by noting that she has a potential conflict of interest in that her sister is an employee
of the City. She added that she did not think this would affect her ability to make a decision based
on facts. She went on to ask in regards to credit card fees and the potential to increase franchise
fees from 8% to 10%. Additionally, she added that the increase in electric and if all of these
increases could be used to offset the credit card fees. Welch added that analysis could be brought
back regarding this.
Bachman spoke to clarify Slattery's question that the $5.00 public safety fee would also be added
that to the utility bill. Welch responded that it would.
Mayor Stromberg asked about the Community Center and City Hall due to them both being
deemed unsafe and if provision had been made to deal with them. Welch stated that there is a
little bit of attention given to this. Paula Brown, Public Works Director went on to add that there
are minor improvements previously listed in the Capital Improvement Plan, that have some
Budget Committee Meeting
April 17, 2019
Page 7 of 10
funding set aside for the Community Center, but that the impact was not fully known when the
plan was put together. In regards to City Hall, she added that there was taken into consideration
a process in design. She added that this will be proposed to Council and that there may be
projected funding in the out years for City Hall.
Runkel added that what he saw in the Capital Improvement Plan could affect utility rates in the
future within the enterprise funds. Brown, added that there is currently a study for an update to
the cost of service on water and wastewater, with numbers being available by the end of May.
This plan Brown added would look at the long term projection and that rates are correct. Runkel
added that he was concerned about the increase in the previous biennium, as the City is not
growing. Brown stated that much of theincrease was due to the Water Treatment Plant, within the
next three years.
Moran also asked why the budget committee was not involved in the long term projects. He added
a previous related article written by Mayor Stromberg on this topic. He also expressed that he
knew of $100,000 that had previously been allocated but that no other details had been given. He
ended by stating that if it has to do with funding that the Budget Committee should be involved.
Welch responded by saying that the Budget Committee was not utilized properly in the off season
and that figuring this out was one goal of the Budget Ad Hoc Committee. He added that because
of this meeting schedules to keep the Committee updated with information and items such as
quarterly financial reports were seen as helpful. He also noted that in the future other topics could
be covered. He added that he thought that Council would welcome Committee input and
discussion. Moran added that he would like to set the policy that the Budget Committee be
involved in financial decisions.
Slattery added that he did agree with Moran. He then went on to question the idea of an
Operational Levy structure and where potential further cuts would be needed in lieu of a revenue
enhancement. He further explained that City government could be smaller and that the City
should look to fit within in its means without revenue enhancements. Welch clarified that the
impact to the community and the department based on those cuts would be huge. Slattery went
on to state that a case would need to be made for the Levy and that the community should be
made aware of the levels of service changes if drastic cuts were made. Welch responded that it
would not be possible to go back to the drawing board to make the cuts needed without a Levy
or Revenue Enhancements. He added that a level of funding that would be needed would be to
eliminate the Fire Department and outsource it to District 5, which would be a drastic change.
Also in terms of public safety he added that you would be possibly looking at outsourcing Police
to the Sheriff's office. He ended by stating no more additional cuts could be made without risking
safety. Slattery added that he appreciated this being said.
Runkel added that there is an alternative that was not discussed that has to do with salary levels.
He went on to explain that during difficult budgets you have to ask employees is it worthwhile to
work at a reduced salary. This he also stated would not be a popular option, but one that should
be discussed. Welch responded that of the non -represented staff that each 1 % would equate to
$18,000.
Hyatt asked about the impact of cuts, and clarified that such departments such as Police and Fire
are funded through General Fund, as other departments do not come out of the questioned
general fund. Mark responded that this is correct.
Budget Committee Meeting
April 17, 2019
Page 8 of 10
Morris asked if a position is cut what service would be cut in such departments as Community
Development. Welch added that he would prefer not to have this discussion as these are currently
filled positions. He spoke that the position that is being proposed to be cut in his department will
add a loss internally as it cannot ever be replaced. Courts could also see a reduction in hours of
service, and Administration will could see a cut of a communication position.
Stromberg explained three other strategies, including increasing the AFN market penetration in
the form of competitive services at competitive prices creating a revenue stream. Welch added
that this is something that is being looked at, he also mentioned the current marketing that has
increased a focus on being local. Another realistic option with AFN would be to charge a franchise
fee. Stromberg also looked at the market value of the tangible assets. He noted that although he
did not believe in using one-time money to deal with problems, that the larger debt of the
Wastewater Treatment Plant and AFN could use underperforming assets to pay off the principal
of larger debt to reduce cost streams. Welch noted that the City Administrator was committed to
an asset management plan and that this could be used or evaluated.
Moran followed the discussion from Councilor Slattery in regards to outsourcing services. He
added that the conversation regarding Mercy Flights should still be considered, as well as cost
benefit analysis. Welch added that money has been included in the proposed budget for an
analysis of this with external staff looking at these evaluations of costs and impacts. Moran
suggested that he did not want the City to pay for this kind of study as they already have an expert
on staff in City Administrator, Kelly Madding.
Jensen added to Moran's comments that he did think that committee was still considering this
and that he felt that the Fire Chief was open to talk of some consolidation.
Hyatt asked that within the outline of revenue enhancements and offsetting revenue, it was shown
well what would be given for each cost. She did however ask about what increase in AFR would
be used to support. Welch answered that this would be used to support the overall program in
such areas as going out for grants. coordination and CERT. Hyatt clarified that items such as
going out for grant funding and CERT would have to be cut if not funded with the increase in the
fee. Welch responded by noting that with no fee there these services would not be done as well
as they currently are.
Jensen added that as AFR program itself has received national recognition and that is something
that should not go away.
Morris added that he would disagree that the City is addicted to spending. In his experience he
has noticed an addiction to services and that everyone demands different things which makes
Ashland not like other local cities. He suggested looking at if the City is getting value for what they
want.
Hyatt continued by asking Welch what his idea would be for the committee beginning to tackle
the proposed options. Welch added that he hoped that everyone saw why the proposed budget
was released only this evening as it needed be explained. He added that he understands that this
will take time for everyone to digest and that he is proposing that next week Enterprise Funds are
looked at, and then during the proceeding meetings that General Fund be closely looked at. At
that time all of the options and information needed can be discussed, this would be at the May 1 sc
meeting. Hyatt clarified where questions regarding the budget could be directed to. Welch
Budget Committee Meeting
April 17, 2019
Page 9 of 10
answered that they could come directly to him and they would have communicated with other staff
members.
Hunter went on to question the large number under contractual services. Welch noted that the
total percentage is actually down. He added that the view of this includes other recession years,
and that the comparison of the total percentage being down compares with the previous year's
budget. He also stated that this amount for services also includes the ESCO contract and the
Parks contribution.
Welch went on to discuss the new format of the budget, which includes a version on the City's
website that is the same as that presented to the Budget Committee in a printed format. Welch
added that one of his goals when he was hired was to better the budget book as directed by City
Council. He also communicated that the focus was now at the fund level, as he thought this was
the most important part of the budget. The goal of this redesign was to provide information that
everyone could understand. Also, included in this book was an expansion of the charts and a
focus away from divisions to departments. In the end the goal was to provide a book that 95% of
people could read and understand. He also stated that there was another level and that 5% of
want another level. He also stated that this is a living document and that he wanted to feedback.
He went on to state that in order to provide more of a yearly basis, an online interactive version
was also created as the first in Government Finance that is integrated into the budget module and
the first 100% interactive budget book. Welch explained the committee the features of
ashlandor.opengov.com including the live budget with live charts that provide more information
by clicking down further. Welch commented that he sees this as the future of government
accounting. Welch also noted that this format also allows for reports such as those related to
positions. He added that being able to provide this information especially in a tough budget season
in a transparent way is helpful the committee, staff and the community.
Hyatt thanked Welch for his work on this project. Runkel also thanked Welch for his attention in
putting the budget in a fund focused format. Runkel also asked in regards to overtime costs being
viewable in OpenGov. Welch confirmed that this information could be seen in OpenGov, adding
that this is also a discussion item within the site and that this information could be made into a
PDF if the committee requested.
Councilor Seffinger asked Welch if personnel costs could be looked at in relation to the added
value services and Commission work. Her concern was that many services within the City are not
basic services and that this had made it more expensive. Welch added that he would try to work
on a breakdown of this work.
Hyatt reminded the committee that since the budget process has commenced, the Committee
should not discuss or deliberate the budget outside of meetings, she referenced the legal
framework document handed out the committee.
Kelly Madding, City Administrator explained the two extra documents that were handed out to
Committee Members. These included the legal framework document form the Budget Ad Hoc
Committee. The other document distributed to Committee members was the Council goals. She
highlighted the text on the goals and the functions in a work program setting. She also spoke to
the high priority that was placed on essential services as a Council Goal. Madding also stated
that Welch used these goals when the budget proposal was being planned and that they were
apart of the method to these proposals. She also thanked Welch for his enthusiastic work on
making the budget transparent, and additionally thank staff and department heads for their work.
Budget Committee Meeting
April 17, 2019
Page 10 of 10
She ended that those who work for the City do so wanting to provide explementary service and
that bringing this type of budget with cuts was a courageous act.
ADJOURNMENT
Slattery/Jensen motioned/seconded the adjournment of the meeting. Discussion: None. Meeting
adjourned at 8:00 p.m.
Respectfully submitted,
Natalie Thomason
Administrative Assistant