HomeMy WebLinkAboutMinutes 11/21/1997 3600
CITY COUNCIL SPECIAL MEETING
Port Angeles, Washington
November 21, 1997
CALL TO ORBER - Mayor Ostrowski called the special meeting of the Port Angeles City Council to order at
SPECIAL MEETING: 4:10 p.m.
ROLL CALL: Members Present: Mayor Ostrowski, Councilmembers Braun [arrived at 4:15
p.m.], Campbell, Doyle, Hulett, McKeown, and Wiggins.
Members Absent: None.
Staff Present: Manager Pomeranz, Attorney Knutson, B. Becker, S.
Brodhun, B. Collins, K. Godbey, J. Pittis, B. Titus, Y.
Ziomkowski, J. Mason, T. McCabe, T. O'Neill, B. Coons, and
T. Smith.
Public Present: P. Hannah.
1998 Budget 1998 Budget Presentation: Mayor Ostrowski opened the public hearing and called on
Presentation City Manager Pomeranz to give the budget presentation. Manager Pomeranz commented
on the amount of work that goes into the budget document, and that the budget document
has received the Government Finance Officers Association's Distinguished Budget Award
for the past six years. The budget document provides detail, understandable information
that gives a historical perspective on the City's expenditures, revenues, staffing levels, and
comparative tax and utility rates. The overall tone of the budget is positive, and because
of the financial plan put into place by City Council and staff, we have presented a budget
that is balanced, spending is down, and we have a fund balance in the amount of $2.8
million.
Manager Pomeranz presented a sunanary of the City's budget. The City's operating budget
is $38,791,337 and is supplemented with transfers and capital improvement projects to
produce a total financial program of $46,722,504. Approximately 59% of the City's
budget is for the utilities; the General Fund only accounts for 28% of the total budget. The
largest area of spending is in salaries - approximately $12 million is spent on salaries and
benefits. Manager Pomeranz reviewed the highlights of the budget: An overall 4.3%
reduction in spending as compared to 1997; eight less positions in the budget; a net 2.4%
reduction in property taxes; the budget is balanced with expenditures matching revenues;
and a $6.6 million capital improvement program.
The General Fund budget accounts for the tax-supported areas of the City such as Fire,
Police, Parks and Recreation, Administration, and Finance. The General Fund budget
amounts to $10,693,486, a 2% decrease over the 1997 budget. About 74% of the budget
is in salaries and benefits, which makes it difficult to cut back without touching people. All
of the departments have supported the efforts to reduce the budget, as indicated in the
budget. Almost every department has a reflected a reduction in spending. Budgeted
General Fund revenue reflects a 1% decrease. The Finance staff is very accurate in
estimating revenue and is conservative in their approach. We are proposing a 6% increase
in property taxes, and projecting a slight increase in sales tax revenue. A decrease in the
electric utility tax is projected, largely due to the Rayonier closure. Manager Pomeranz
talked about the General Fund reserves which can be used as a cushion during an economic
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CITY COUNCIL MEETING
November 21, 1997
1998 Budget downturn. Director Godbey mentioned the importance of reserves, as she is considering
Presentation refunding several bond issues to save interest costs.
(Cont'd)
Manager Pomeranz summarized Referendum 47, which limits property taxes to the rate
of inflation, which is 1.9%. If the City Council wishes to raise property taxes by 6%, there
are some steps that the Council needs to take. The Council needs to pass a resolution by
a supermajority, and show a significant need, such as the loss of a major employer.
Manager Pomeranz explained the differences in revenue between the 1.9% and the 6% tax
increase. The 6% increase would cost a taxpayer approximately $9 a year for a home
valued at $100,000. An analysis comparing the City's property tax rate to other cities with
comparable assessed valuations was presented. The City's regular tax rate is within the
average of other comparable cities. The City will be making the last payment on the 1978
City Pier Bonds in 1998, and the last payment on the 1993 Solid Waste Bond will be made
on January 1, 1998. The City's tax-supported debt per capita is 44% lower than the
national median of cities in our population range.
The impact of the Rayonier closure has been substantial, but less than anticipated.
Manager Pomeranz feels that the total impact of the closure has not been felt. Director
Godbey mentioned that the sales taxes have been very volatile in 1997; sales taxes in the
first six months of 1997 experienced an 11% decrease over last year; the next three months
were at the same level; the month of October was 11% over October, 1996, and the month
of November was down by 5% as compared to last year. A detailed analysis of the sales
tax collections indicates growth in construction and automotive sales. All other retail sales
show a decrease over last year. Utility taxes are down; however, we are still conservative
in the 1998 estimate.
Over $1.25 million has been saved due to attrition. Approximately twenty-three positions
have not been filled since 1993. The capital improvement program amounts to $6.6
million in 1998. Projects include the library, volunteer field, waterfront trail, chipseal
program, water projects, electric projects, and the landfill extension. Another project that
we would like to look at is the development of a plan for the renovation of the pool. The
facility is forty years old and needs to be upgraded. People want more activities in addition
to swimming. We will be asking for $20,000 for a plan for the pool upgrade.
The utilities account for a 6.4% decrease in spending, largely due to the reduction in debt
in the Solid Waste Fund. City residents benefit from a combined utility bill that is 15%
less, on the average, than eleven other cities. Two positions are not being filled in the
utilities. With the exception of water, there are no planned rate increases in 1998. A
typical City resident saves $270 a year over the average of these comparative cities.
Manager Pomeranz concluded the highlights of the budget document and explained the
Bureaucracy Busting suggestion that enables employees to cash out a portion of their
accrued vacation leave. Mr. Jamie Mason presented the suggestion to the City Council
which would allow an employee with more than 200 hours of combined sick and vacation
leave to cash out a maximum of 40 hours per year. Mr. Mason outlined the benefits of the
suggestion. Staff answered questions relative to the details of the suggestion, and the
budgetary impact of implementation.
Manager Pomeranz reviewed the budget and commented that a review of the City's goals
is tentatively scheduled for January. Staff answered questions relative to debt, property
taxes, revenue projections, and departmental budgets.
Director Godbey explained the 2.4% net decrease in taxes resulting from a proposed 6%
increase in the regular levy, and a 34% decrease in the special levy. In 1998, interest
earnings from the Library Construction Fund will be diverted to the Library Debt Service
Fund to apply toward the 1998 debt service payments. As a result, there will be no library
special tax levy in 1998.
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CITY COUNCILMEETING
November 21, 1997
1998 Budget Councilmember McKeown explained the allocation of the United Way appropriation and
Presentation answered Council questions. Manager Pomeranz concluded with the Facility Maintenance
(Cont'd) budget. An additional meeting is scheduled for 6:00 pm on December 2.
Mayor Ostrowski then ClOsed the public hearing.
ADJOURNMENT: The meeting was adjourned at 6:00 p.m.
~'~t~y J. lJpt(~ city ~rk -- /"-- -~osper Ostrowski, Mayor
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