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HomeMy WebLinkAbout2025-03-31 Study Session MINASHLAND CITY COUNCIL STUDY SESSION MINUTES Monday, March 31, 2025 Mayor Graham called the meeting to order at 5:30 p.m. Council Present: Mayor Graham, Councilors Knauer, Dahle, DuQuenne, Hansen, and Kaplan. Bloom appeared via Zoom. Council Absent: none Staff Present: Sabrina Cotta City Manager Marianne Berry Finance Director Bryn Morrison Deputy Finance Director Alissa Kolodzinski City Recorder Rocky Houston Parks Director Public Input - none II. Budget Background - City Accounting & Fund Structure Berry and Morrison provided a presentation (see attached) as a first in a series of budget background study sessions to provide information on the City's budget process for the Citizens Budget Committee that will be convened beginning April 30, 2025. • Dictated by Oregon Local Budget Law - ORS 294 • Timeline for budget process: April 301h - proposed budget to Budget Committee; May 14th - Committee approves budge; June 3, Council adopts budget. • Fund balances represent the net position of a fund and will differ from cash balances because Ashland operates on a modified accrual basis of accounting: revenues and expenditures are booked in the year they are received or incurred. • Monies cannot be transferred from one fund to another without legally supported reasons. • Appropriated fund balances are allocated by Council to spend. Unappropriated fund balances are maintained with a calculated minimum reserve, depending on the fund, for emergencies. • Restricted funds are legally bound in use, whereas committed funds have been carved out by Council for use but are not legally restricted. • City funds include the general fund, special revenue funds, capital project funds, debt service fund, enterprise funds, internal services funds, and cemetery trust fund. • Ashland's budget and staffing levels differ from other municipalities of similar population size because Ashland operates its own electric, water, wastewater, and internet services as well as its own fire department, wildfire division, and emergency medical transport services. • The general reserve fund helps to stabilize the budget as it fluctuates and has grown in the last couple of years. Utilization of this fund is governed by fiscal policy and allocated through the biennial budget process. Various contingency funds are maintained for emergencies. City Council Study Session March 31, 2025 Page 1 of 4 • Capital Improvement Project (CIP) funds are set by Council adoption of a six -year CIP plan for inclusion in the budget process. System Development Charges (SDC's) and any debt issuances are restricted to the fund for which they are assessed. • The budget resolution is adopted by the Council and appropriates the general fund by department. Funds cannot be transferred between departments. • The airport fund exists as its own special revenue fund. • The bulk of the biennium budget are enterprise funds that require a 25% unappropriated ending fund balance in addition to contingency balances. III. Review City Assistance Programs for BN 25-27 Berry and Morrison provided a presentation on the proposed assistance program (see attached). • Current programs include Ashland Low -Income Assistance Program (ALIEAP -based on income for December 1 through end of February or May and for electric only - must reapply annually), Senior/Disabled Utilities Discount (year-round program based on income for both electric, water, sewer, street user, and drain with no need to reapply), and Emergency Heat Assistance (once a year, based on income). • Customers that qualify for the Senior/Disabled Discount automatically qualify for the ALIEAP discount in the wintertime and do not need to reapply. • Based on the 2024 fiscal year, 517 total customers were utilizing the discount program, with an average savings of $360 for the Senior Discount and average of $206 for ALIEAP. • The equivalent of one full-time position (FTE) is currently required to administer the programs. • The proposed assistance program could include year-round assistance based on one of several proxies (OHP, SNAP, ALIEAP, or other), and eliminating the age requirement with a potential biennial budget of $573K ($490K for Electric and $83K for Water, Wastewater, and Streets). This represents an increase of $191K from the previous biennium. • Council discussed various potential qualification criteria for the proposed assistance program. • Staff proposed a pilot program with the City's current income qualifier threshold, application process opening each May, and offered year-round, starting July 1 at a 30% discount monthly (excluding internet). An additional $200 discount in the winter months is proposed for seniors currently enrolled so that they do not experience a reduction in benefit. • Conservation funds come from rebates from the Bonneville Power Administration (BPA), if the City's assistance program is extended, new funding sources will be needed. • Discussion on how to match the level of need equitably, how to administer, whether the benefit should be capped, to explore if partners are able to provide solid estimate of how many would qualify, and how to leverage partners to spread the word about the program in the future. • Direction to staff is to bring back information on a program based on income level only, is as simple as possible, only discounts rates while retaining fees, considers a benefit cap, and to reach out to partners for potential data on number of households that would qualify. IV. Budget -Related Fees Discussion: Public Safety, Wildfire and Parks Fees Cotta and Berry provided a presentation (see attached). Cities all over Oregon are grappling with budget shortfalls. Prior to this fee discussion, each of the City's general fund budgets have been City Council Study Session March 31, 2025 Page 2 of 4 reviewed to reduce materials and services. Each department has cut approximately 5% from their budget, positions have been reviewed for possible consolidation or other increased efficiency, and no funding was included to address additional needs previously identified by departments. Cotta provided a fee comparison with neighboring municipalities and suggested service level expectations need to be reviewed. Ashland fees have not increased in many years and does not include a parks fee, whereas neighboring cities do. Ashland's Fire and EMS services are also different from other municipalities. Main general fund revenues are only expected to increase 1-3% for the next biennium as property taxes are capped at 3% per state law. Franchise fees have been impacted due to no rate increases, and the electric user tax (which operates more as a service fee because it goes into general fund) has only increased less than 1% in the last five years. Transient Lodging Tax revenues are down 12% since 2019, and grant revenues are expected to be reduced due to federal limits. Personnel costs are increasing at 15% which out paces the expected 3% revenue increase. • The 15% increase is based on cost of living and healthcare increases and does not include overtime. The state -mandated Oregon Paid Leave program is expensive. Staff are exploring a third -party administrator to reduce this cost and to adjust staffing levels moving forward. • Public Safey and AFR fees have not increased since 2018 and 2019 respectively, despite increased personnel costs. Parks operational costs have increased, which cannot be offset by food & beverage tax - which can only go towards capital improvements. Cotta presented a proposal with alternatives for dedicated fees of priority programs for cost recovery: • Staff proposed to return with a resolution for a public safety fee of $5.00 (currently $1.50) to transition the Single Role program from a pilot program to four permanent positions and four additional pilot positions to test and analyze additional data regarding cost recovery for the next biennium. • Alternatives presented included: o $3.00 fee - maintain staffing levels of police and fire minus single role program. o $4.00 fee - transition to four single role positions from the current eight. o $6.00 fee - full single role pilot program becomes permanent while analyzing cost recovery moving forward. • Discussion regarding acceptable service -level expectations, the difference between dual -role and single -role staff and the impacts of dropped calls which the single role program mitigates. • Direction given to staff to build the budget and return with a resolution for a $5 public safety fee to begin July 1, 2025, with cost escalators for future adjustment. • Staff proposed a Wildfire (AFR) fee of $6.00 (currently $3.00) to maintain existing model. • Alternatives presented included: o No fee increase - transition from mitigation to education- a reduction in staff in year 2 of the biennium. o $4.00 fee -reduction in staffing from 2 to 1 FTE at the end of the biennium. o $5.00 fee - retain 2 FTE with minimal mitigation and focus on prevention education. o $7.00 fee - retain 2 FTE and continue mitigation work with potential to grow. Discussion regarding the pending Community Wildfire Prevention Plan (CWPP), previous grant funding for prior mitigation work, the potential for building a dedicated fund for wildfire City Council Study Session March 31, 2025 Page 3 of 4 mitigation to relieve pressure from the general fund, the benefits of the wildfire division remaining within the fire department, maintenance within the watershed along with improved home -hardening, and the potential of a tiered fee based on neighborhood location. Direction given to staff to build a budget with a $7 wildfire fee with consideration for cost escalators for future adjustment with discussion of a tiered program to be taken up later. Recess taken until 8:16PM Staff proposed a Parks fee of $5.00 (no current fee) to begin Jan 1st, 2026, to fund the current level of Parks maintenance and operations, staffing for East Main Park, and full staffing at Senior Center. • Alternatives presented included: o No fee increase - reduction in parks maintenance, Senior Center services, and delay or cancelation of East Main Park with a return of grant funds. o $3.00 Fee - Maintain current parks maintenance levels only. o $4.00 Fee - Maintain current parks maintenance and Senior Center service levels. o $6.00 Fee - Maintains current parks and Senior Center with increase in service levels. • Discussion of staffing for East Main Park, the cost of mitigating increased vandalism in parks restrooms, operational costs associated with Pioneer Hall and the Community Center, and what reduced services would look like. • Discussion of parks as attracting families and providing economic development opportunities weighted against priorities for essential public safety services previously discussed. • Discussion of divestment options for City and Parks properties to reduce maintenance costs. While the Parks department has had goals to increase land and trails, the focus moving forward will be to maintain what the City already has. • Discussion of Parks user fees, potential for a ballot measure to allocate a portion of the Food and Beverage Tax to Parks, and how neighboring municipalities have adopted Parks fees. • Parks Director Houston spoke of budget cuts already made and the current development of a Parks strategic plan that will engage public input to develop levels of service. • Mayor Graham polled councilors regarding interest of the $5 Parks fee as presented: o Graham and three councilors are for; three councilors are against as presented. • Direction given to staff to bring back more information about what aspects of the parks budget the $5 fee protects and what would be cut if the resolution does not pass. V. Adjournment of Study Session The meeting was adjourned at 9:40 p.m. City Recorder Alissa Kolodzinski Mayor Tonya Graham City Council Study Session March 31, 2025 Page 4 of 4 Budget Process - Session Goals Understanding key concepts Budget Framework Local Budget taw City of Ashland specifics Fund Balance Fund Types General Fund, Special Revenue, Capital Projects, Debt Service, Enterprise, Internal Service Funds Budget Framework •:• Oregon Local Budget Law ■ Citizens' Budget Committee • Comprised of Mayor, 6 Council members, 7 Citizens • Meetings April 30, May 7, May 74, 2025 ■ City of Ashland Budget for BN 2025-2027 • Biennial budget 2023-25 = $385M • Proposed budget to Budget Committee --► April 30th • Committee approves budget --* May loth • Council adopts budget --# June 3, 2025 https://or-ashland.civicplus.com/225/Budget-Process-Resources r llea`ra; Budnet C• • • •• ■• Fund Balance ❖ Represents Net Position ■ Revenues less expenditures • Modified Accrual Basis of Accounting • Fund Balance differs from Cash Balance ■ Fund balance categories • Restricted, Committed, Unappropriated ■ Policies Gevxeraf Fuvtd mivumtAm uv,approprinted evIdivtg fuvtd ba(av<ce _ $1-6.7"/o of average 3 years of expeKditures Ev<terprise FuKds uvtiappropriated = 257% • Minimum fund balance, contingency, other restrictions •:• General Fund ❖ Special Revenue Funds Reserve Fund Street Fund SDC Street Fund Community Dev Block Grant Fund ❖ Capital Project Funds Capital Improvement Fund Parks Capital Improvement Fund • Debt Service Fund •:• Enterprise Funds Water Fund Wastewater Fund Storm Drain Fund Electric Fund ❖ Internal Services Funds Insurance Services Fund ❖ Cemetery Trust Fund Tourism Fund Housing Fund Airport Fund SDC Parks Fund -2 7-Otal of SDC Water Fund SDC Wastewater Fund SDC Storm Drain Fund Telecommunications Fund Equipment Fund General Fund Focus ❖ Revenues • Property Taxes • Franchise Fees • Electric User Tax • Ambulance ❖ Expenditures (generally by dept) • Administration • Finance • Innovation and Technology • Police Department • Fire and Rescue Department Budget Takeaway's • Transient Lodging Tax • Planning & Building • Interest Income • Parks Program Revenue • Public Works Department • Community Development Dept • Parks Department ❖ Reflected in Ashland's budget and FTE - The City operates its own: Electric Water Wastewater Internet services Fire Department Wildfire Division Emergency Medical Transport (EMT) services Budget Takeaway's ❖ Budgeting by fund and by departments ■ Estimating revenues & expenditures • Review historical data and input known information • Based on Council priorities • Evaluate expenditures andjustified cost recovery methods • Best estimate based on above ■ Fiscal policies • City, Government Finance Officers Association (GFOA) QUESTIONS? 's �y�p�y r �- ' t T 5c • f � Y 4* TO A.Jj� MOM 9 „cef 40 UtilityAssistanc March 31 2025 Program Update & Proposal Utility Assistance Program r.: fiu►� Current Utility Assistance Programs ❖ Ashland Low -Income Assistance Program (ALIEAP) • Assists low-income residents with 50% reduction of electric bill • Based on 65% of Oregon median income (or 265% federal poverty level) • Discount December 1 through end of February or May • Maximum $300 credit ❖ Senior/Disable Utilities Discount • 20% or 30% off electric, water, sewer, street user, storm drain • Year-round discount for income -qualified persons age 65 or older, qualified disabled persons age 60 or older • Based on 125% and 100% below federal poverty level, respectively ❖ Emergency HEAT Assistance • $100 toward past due balance, once per 12-month period • 150% below federal poverty level Current Utility Assistance Programs FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 City -funded Assistance Program Actual Actual Actual Actual Actual Actual Actual Actual Actual Low Income Energy Assistance "1 4,: 453 477 4;: 519 545 r S 88 0t2 S 87 063 S 85 614 S 84.253 S 916% $ 109 310 $ 112 626 S 91.410 S 106.140 Average relief applicant -family S IN S IM S 1A $ 177 S 164 S 211 S 287 S 173 S 2K �Diubled Program '6< 174 181 195 116 237 263 281 S 45,523 S 50,285 S 55497 S 60,370 S 73527 $ 90482 S %878 S 101.854 S 101'is S 276 S M S 307 S 314 $ 34 S 362 S 369 S 362 S M FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Total Assistance Programs Actual Actual Actual Actual Actual Actual Actual Actual Actual !, Distributed Amount Low Income Eby Asvwt - S 88,011 S 97,093 s 86,614 S 84,253 S 91,6% $ 109,310 S 112,EX S 97.470 S 106340 SenarDsahleePWarn 45.523 50,285 55.481 60,370 73.527 90482 96,878 101,854 101'+: Heat Pm am 40 2,800 Z900 2.800 3,600 1,100 830 1,400 14): TaWDiauibuled S 138,335 S 140,168 S 145,001 S 147,423 S 168793 S 200,892 S 210,304 S 200124 S 209,328 B649e. $ 149,500 $ 149,500 S 156.000 S 159,120 5 160,038 $ 160,038 S 190,700 S 190,700 S 190700 % of DatrikftdGudpd 13% 94% 13% 93% 116% 126% 111% M% 10% n Current Utility Assistance Programs ❖ Customers served - based on FY24 • Total 517 customers annually • Total annual budget $190,700 • Total distributed $209,328 • Average relief for Senior Discount $360 • Average relief for ALIEAP $206 ❖ Operational requirements ■ 1 FTE in Utility Billing Division Proposed Assistance Program ❖ New Program Year-round assistance ■ Income qualifier, such as OHP, SNAP or other • Potential BN 25-27 Budget = $573K Increase of $191K from BN 23-25 • Breakdown: $490K Electric $ 83K Water, Wastewater, Streets Proposed Assistance Program •:• Considerations 1 OHP & SNAP are lower thresholds than City's current • OHP:100% Federal Poverty level o Income cannot exceed $1,255/month o Reaches only 50% of current ALIEAP customers • SNAP: 200% Federal Poverty level o Income cannot exceed $2,510 per month o Reaches 82%of current ALIEAP customers • ALIEAP: 265% of Federal Poverty level income cannot exceed $3,323 per month * based on single person family Proposed Assistance Program Considerations Averages • Average bill $96 a month • Average discount $358 a year, -$30 a month Breakdown of discounts received annually • 3% receive over $1,000 95-105 customers • 15% receive $600-999 • 81% receive $250-599 420-450 customers Seniors • 48-55% are seniors Proposed Assistance Program ❖ Pilot Program ■ Income Qualifier: Current City's threshold • 265% Federal Poverty level o Income cannot exceed $3,323/month Application process opens each May • Non -existing seniors apply May 1st • Year-round starting July 1st, received 30% discount monthly o Excludes Internet o Applies to Public Safety & AFR Fees • In order to not harm Seniors: On Dec Pt. automatic $200 discount for winter months rME M R Proposed Assistance Program ❖ Pilot Program • Estimated Program Cost • Within annual budget of $286K • Estimated assistance at approx. $25642861('per year • Will assess program metrics July 2025 ✓ Expands program ✓ Considers current population served ✓ Maintains reasonable staff workload ✓ Stays within funding levels and/or be easily adjusted after Year 1 QUESTION ALDC League of Oregon Cities o fid ,A Local governments across Oregon are grappling with budget shortfalls, and the LOC is advocating for a review of the state's property tax laws. Lobbyist Jenna Jones emphasized the need for reform: -Our biggest thing is getting the legislature to help us convene the necessary people to start talking about [this]. What is the new property tax system that replaces the one that we currently have that is actually adequate, that's fair, that equitable for local governments and for... See more Facing multi -million -dollar shortfalls, local governments set eyes on OR property tax laws Overview ❖ Budget Process • Reviewing and reconciling past biennium • Budget direction: No increase • Estimating Revenues & Expenditures- each department has reduced budget by -5% ■ Assessing Program Priorities & Service Levels ■ Combining positions & moving where most needed ❖ Reviewing increasing fees to match service level expectations • Public Safety, currently $1.50 per electric meter • Wildfire, currently $3.00 per % water meter ■ Parks, currently no fee Other Jurisdictions CITY COMPARATIVES Population Fees Public Safety $ Parks Wildfire Aurhotized FTE Police Fire Parks Ashland Medford Central Pt. Talent Grants Pass 22.086 84,423 19,918 5,228 39,112 1.50 10 16.07 $ 2.00 $ 4.00 $ 12,36 0.00 5.35 6.00 8.43 0.00 3.00 0.00 0.00 0.00 0.00 4.50 21A2 $ 8.00 $ 12.43 $ 12.36 39.00 130.70 31.00 10.65 57.00 47.00 108.20 0.00 0.00 31.00 37.00 70.00 Z15 4.00 28.00 123.00 308.90 38.15 14.65 116.00 Parks Acreage 811 1 inotavailab(e 2,227 not available 36 196 Number of Parks 20 37 9 not available 24 Trails 53 not available not available not available ' Compared to neighboring cities, Ashland trails in cost recovery 6m ' • • • Main General Fund Revenues* *,*:- Revenue expectation 11-3°1 for BN 25-27 Property Taxes = $13-5M Capped at, ■ Franchise Fees = $4.OM Impacted due to no rate increases for utilities OElectric User Tax = $3.6M 'Ll • On average has only increased less than 75,1'in the last 5 years 4R* Actuals for Fiscal Year 2024 Aj Main General Fund Revenues Revenue expectation 1-3�, for BN 25-27 • Transient Lodging Tax = $1.9M Since 20231 31%goes to Tourism Fund and remaining in GF 0 SInce 2079, total tax down 12%, 0 Grant Revenues • Received Covid and state grants last two bienniums to fund operations and unhoused initiatives . Forecasting large decrease In grant revenues In BN25-27 Main General Fund Pressures •:• Personnel costs & Service level expectations ■ Personnel most valuable asset and necessary to provide service • -15% increase in personnel costs ■ Service levels • Increase in demand for service • Ambulance calls • Maintenance needs • Transient population General Fund Expenditures General Fund Expenditures FY 2024 Other Community Development 156 Administration _.. 5% Court • IT Finance • City Recorder Parks • Police . Fire •PW . Communry Development . Other CF personnel costs are of total Finance 7% expenditures City Recorder Key expenditures 1% expected to grow by 25% in i3N 25-27 _ Parks 14% 0 Ij Cost Recovery ❖ Police & Fire • Personnel costs for both depts have increased • Public Safety & AFR Fees have not increased since 2018 & 2019 ■ While Ambulance revenue covers Single Role EMS and addresses dropped calls, program is an increase of 8 FTE or $1.5M per year less revenue is covering fire personnel. ❖ Parks • Operational costs have increased,- prohibition of herbicides increases staffing • Food & Beverage tax cannot go towards Parks operations, only capital improvement. Dedicated Fees for Priority Programs: Public Safety $5 ($60/yr) Public Safety $530K annual increase funds: • Transition the Single Role program from a pilot to permanent for four single role positions • Continue to vet program & cost benefit ratio given uncertainty on cost recovery • Goal.' Maintain call volume response rate with the single role program No fee increase: • Remo val of single role program Altematives- • Unable to maintain single role program • Maintain staffing levels of police & fire minus single role program • Transition to 4 single role positions from 8 • Full pilot transition to permanent • Need additional time/ information of full 8 team members & cost recovery Dedicated Fees for Priority Programs: Wildfire (AFR) $6 ($72/yr) Wildfire Fee (AR)$416K annual increase funds: • Dedicated funding for mitigation work (one-time funding used prior for large scale mitigation work) • Dedicated funding for wildfire personnel & emergency management No fee increase: • Transition from mitigation work to education only work • Reduction in staffing year ofBN Alternatives- �"- = g. = • Reduction in staffing • Retain 2 FTE • Retain 2 FTE & option to from 2 FTE to 1 FTE end of • Education only, minimal increase BN mitigation • Mitigation work & grow fund for additional mitigation work watershed & City Dedicated Fees for Priority Programs: Parks $5 ($60/yr) Parks Fee starts Jan 181, funds: • Maintain current level of parks maintenance and operations • Funds staffing for East Main Park • Full staffing of senior center No fee increase: • Reduction in parks maintenance • Reduction in senior center services • Fast Main Park delayed or does not move forward • Return grant funds Alternatives: • Maintain current parks Maintain senior center maintenance levels services current levels • Maintain current parks maintenance levels • Maintain senior center services current levels • Maintain current parks maintenance levels • Increase in mitigation and maintenance work Dedicated Fees for Priority Programs FEE REVENUE Current Proposed FY25 Proposed FY26Proposed FY27 Public Safety Fee $ 1.50 $ 5.00 $ 220,000 $ 750,000 $ 750,000 AFR Fee $ 3.00 $ 6.00 390,000 806,000 806,000 Parks Fee* $ - $ 5.00 - 375,000 750,000 Total Revenue $ 610,000 $ 1,931,000 $ 2,306,000 Additional revenue Public Safety $ 3.50 AFR ree $ 3.00 Parks Fee* $ 5.00 Additional Revenue $ 11.50 * Proposing Parks Fee startlanuary 1, 2026 Next Steps: $ 530,000 $ 530,000 416,000 416,000 375,000 750,000 S 1,321,000 S 1,696,000 Total 3,017,000 Budget Process • Operational efficiencies and staffing are still being reviewed as budget process moves forward & will continue throughout next BN Additional Needs • Facilities • Divestment of property to fund facilities needs • City & Parks QUESTIONS?