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HomeMy WebLinkAboutMinutes 10/28/2004 5449 CITY COUNCIL SPECIAL MEETING Port Angeles, Washington October 28, 2004 CALL TO ORDER - Deputy Mayor Braun called the special meeting of the Port Angeles City Council to SPECIAL MEETING: order at 5:00 p.n~ ROLL CALL: Members Present: Deputy Mayor Braun, Councilmembers Munro, Pittis, Rogers, and Williams. Members Absent: Mayor Headrick and Councilmember Erickson. Staff Present: Manager Quinn, Attorney Bloor, Clerk Upton, B. Collins, M. Connelly, G. Cutler, D. McKeen, Y. Ziomkowski, N. Riggins, and S. McLain. Public Present: No one signed the roster. PLEDGE OF The Pledge of Allegiance to the Flag was led by Deputy Mayor Braun. ALLEGIANCE: PUBLIC CEREMONIES, None. PRESENTATIONS AND PROCLAMATIONS: WORK SESSION: Consideration of 2005 Preliminary Budget: Consideration of 2005 1. Budget Discussion: Preliminary Budget Manager Quinn opened the discussion by announcing the 2005 Budget is balanced, and it incorporates all of the City Cotmcil's Goals and Objectives. Staff was able to put the Budget together much easier than in the past 3 - 4 years, and the document becomes the means by which the City can achieve its desired goals. Finance Director Ziomkowski, with the use of PowerPoint slides, advised the Council there is a change incorporated into the Budget whereby the Financial Management Policy increases the threshold for capital of non-infrastructure assets from $3,000 to $7,500. The overall Budget is $76 million, with $66 million dedicated to operations and $10+ million to capital improvements. The 2005 Budget is supported by $3.3 million or 4.4% from reserves, and revenue is projected at $76,237,452. Director Ziomkowskidelineated other possible sources of revenue that could be considered: an additional 5% telephone utility tax, a 1% levy on gasoline purchases that are available only to border cities, and a $2 per night additional lodging tax. In comparing the 2005 projected Budget to 2004, Director Ziomkowski indicated certain changes were incorporated, such as a 2% COLA, an increase in AWC medical rates of 9.6%, an increase in excess of 100% for PERS & LEOFF 2 rates, a 10% increase in property insurance, no vacation sell back, proposed personnel changes, and proposed organizational changes. In addition, there is an expected increase in support of the Fine Arts Center. She reviewed the proposed restructuring in terms of integrating Parks & Recreation into Public Works & Utilities, as well as a consolidation -1- 5450 CITY COUNCIL SPECIAL MEETING October 28, 2004 Consideration of 2005 of Economic Development and Community Development into one department. Preliminary Budget Director Ziomkowski discussed a s~ of personnel, noting that public safety, (Cont'd) economic development, technology, and field services will improve by virtue of the proposed changes. Director Ziomkowski reviewed the Budget by fund types, indicating that the General Fund of $14,768,615 reflects an increase of 4.4% or $618,875 as compared to the 2004 Budget. Following a review of specifics on the General Fund, she discussed capital outlay, transfers to Capital Improvement and Street Funds, and improvements to be realized by virtue of the Capital Improvement Program. Those improvements include the International Waterfront Promenade, the Gateway parking garage, the NICE Neighborhoods Program, the Front Street corridor streetscape, widening of the Lauridsen Boulevard bridge, and the Campbell Avenue/Mt. Angeles infrastructure improvements. Others projects identified were the Valley Creek restoration, the Laurel Street pavers, the Shane Park renovation, Elks Play field improvements, and others that were identified as part of the CIP process. Director Ziomkowski then discussed detailed projections for the General Fund reserves, Special Revenue Funds, as well as the various utility funds. She concluded by advising the Council that the 2005 Budget shows slight improvement, but there will still be restricted growth in taxes. It is important to conduct stronger fiscal planning and year-round budgeting, and the leveraging of financial partnerships with outside resources must be maintained. There will be increased reliance on user fees, and there is a need to increase the assessed value, wealth, and investment in the community. Discussion followed, with Director Ziomkowski answering questions posed by the Council. Councilmember Williams referenced the revenues generated by taxes on the utilities, noting that much of the support in public safety is derived from those utility taxes. He expressed concern that one customer provides a large part of the utility taxes upon which the City is reliant, and he urged the City to give consideration to funding police and fire through some type of junior taxing district. He stressed the importance of making certain the City's basic services can be properly funded without being vulnerable. Councilmember Pittis felt the Council should consider issues such as this through the goal-setting process. Further discussion ensued with regard to reserves that will be used in 2005, budget information available on the website, and other revenue sources that might be considered. Director Ziomkowski then reviewed the remainder of the budget calendar, noting the next public hearingwill be conducted on revenues on Monday, November 1, 2004. Fees 2. Fees: Director Ziomkowski used PowerPoint slides to present a proposed Fees Ordinance, incorporating changes in City fees and charges for services. She informed the Council that the last comprehensive review of fees and charges for services was conducted in 1996, with only minor adjustments made over the years. Some of the changes already implemented relate to Medic I ambulance fees, and consideration is currently being given to revised Animal Control fees. She noted that it is necessary to implement revisions in view of an increasing cost of doing business. In addition, the City's fees should be comparable to other entities, plus there should be equitable charges for City residents and for County residents who use City services. She reviewed the proposed changes, noting that charges for County residents have been set at approximately 50% more than City residents. Some fees and charges are being maintained at current levels. Discussion ensued, and Director Ziomkowski advised the Council that action on the fees would be requested at a future Council meeting. -2- CITY COUNCIL SPECIAL MEETING 5451 October 28, 2004 Break Deputy Mayor Braun recessed the meeting for a break at 6:20 p.m. The meeting reconvened at 6:30 p.m. Utilities/Rates 3. Utilities~Rates: Director Ziornkowski distributed to the Council copies of all current and proposed utility rates. Director Cutler and Deputy Director of Power Systems McLain, with the use of PowerPoint slides, then provided an overview of utilities. The history and function of the Utility Advisory Committee was discussed, as well as the reason for doing rate studies, which is to meet the revenue requirements of the utility and to insure that rate classes pay their fair share. Deputy Director McLain reviewed the principles of rate design, informing the Council that the City has historically chosen to institute smaller increases on a yearly basis as opposed to a larger increase at one time. In addition, the City's past practice has been to project rates over a five-year period, with implementationofincreases set for 3 years. In doing cost of service studies and setting rates, the City has sought the assistance of consultants due to limited staff time, as well as the consultant's experience with other utilities throughout the State. A beneficial perspective can be gained through the use of consultants. Deputy Director McLain reviewed for the Council the rate-setting process in terms of establishing revenue requirements, cost of service, and then rate design. Director Cutler discussed in detail the issues and challenges pertinent to each utility and the need to accurately set rates to fund the needed projects and infrastructure improvements. He also provided a comparison of Port Angeles rates with other entities, such as Port Townsend, Anacortes, and the Clallam County P.U.D. Director Cutler advised the Council that a rate study for the Water Utility is planned for 2005. Discussion then centered around Electric Utility rates; Deputy Director McLain indicated it will be difficult to not increase rates next October because of the Cost Recovery Adjustment Clause that moves up and down because of power purchases. Also discussed were required time frames involved when the City provides services to P.U.D. customers due to annexation. Councilmember Pittis inquired as to whether the City should give consideration to adding another member to the Utility Advisory Committee as a representative of the commercial customer class. Councilmember Williams indicated the UAC had considered the possibility before, plus it considered adding representation from the UGA. It was, however, concluded that the Councilmembers on the UAC would become a minority. Councilmember Rogers indicated the matter would again be taken under consideration. Open discussion followed on the Budget in general, and Councilmember Williams expressed interest in seeing the same fees for dogs and cats. Councilmember Rogers, on the matter of rate setting for the utilities, indicated the Utility Advisory Committee had fully discussed the rate-setting mechanism. She understood why rates are set for three years, and she urged the Council to endorse the three-year rate projections. Discussion also ensued on BPA rates and whether there will be a rollback. Director Cutler felt the BPA matter was still unresolved, so the City has opted to keep its rates at the current level. A question was raised as to the City's bond rates, and Director Ziomkowski clarified how the rates are set. The City is currently rated A2 for GO Bonds and A3 on Utility Bonds; she felt the 2005 rating should be the same or better. ADJOURNMENT: ('~eeJ~ng ~ a/~rn~_at 7:2~.m. ~ ~ Richard A. Headrick, Mayor B~cky J. Upto[,~ity ~rk -3-