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HomeMy WebLinkAboutMinutes 11/30/1993 2612 CITY COUNCIL SPECIAL MEETING Port Angeles, Washington November 30, 1993 CALL TO ORDER - Mayor Hallett called the special meeting of the Port Angeles City Council to order SPECIAL MEETING: at 6:20 p.m. ROLL CALL: Members Present: Mayor Hallett, Councilmen Braun, Hulett, and Ostrowski, Councilwoman Sargent, and Councilmen Schueler and Wight. Members Absent: None. Staff Present: Manager PomerarLz, Attorney Knutson, S. Brodhun, B. Collins, L. Glenn, K. Godbey, S. Ilk, J. Pittis, B. Titus, Y. Ziomkowski, and T. Smith. Public Present: C. McKeown, L. Doyle, and J. Honnold. Public Hearing & Work Mayor Hallett opened the public hearing at 6:22 p.m. Session - 1994 Proposed Budget City Manager Pomeranz reviewed the budget message to the City Council. The City budget addresses four main goals: maintain the level and quality of basic municipal services, maintain basic infrastructure and capital equipment, stabilize both short and long term financial positions, and develop tactics to manage future obstacles. It is intended that this budget clearly and accurately projects the City's financial position, and projects how the City's revenues and expenditures are allocated. The City is heavily dependent upon the timber industry which has been heavily impacted by the restrictions placed on log exports. The temporary shutdown in ITF Rayonier's operations will have a negative cumulative effect on General Fund utility taxes by an estimated $200,000. The Reinventing Government Committee was an incredible success, with over 200 money-saving suggestions submitted. Some of these have been incorporated into this budget, others are being studied for future implementation. Mayor Hallett inquired as to the results of the recent citizen survey. Manager Pomeranz indicated the results will be published in the next issue of the City newsletter. Some of the citizens' concerns, such as sidewalks, are addressed in the 1994 budget. Manager Pomeranz reviewed budget highlights. The 1994 preliminary operating budget amounts to $43,375,000, plus capital improvements, for a total budget of $56,248,124. The 1994 General Budget is increased 3.2% over the 1993 budget. A brief discussion followed on whether wage increases were included in the budget and how these were projected. Councilman Braun commented that he was very supportive of "holding the line" on new programs, and felt that attrition should be used to help keep spending down. Councilman Wight felt that the City Manager was responsible for making such a judgment; however, the City Council could make a policy statement reflecting a preference that vacancies be left open when possible. Councilman Braun agreed. A brief discussion followed on the impact of eliminating personnel. Councilman Ostrowski pointed out that on Page vii of the budget, the chart at the top of the page shows 1994 Proposed Enterprise Funds to be $2 million, which should be corrected to read $28 million. Manager Pomeranz informed the Council that the capital improvement program for 1994 is $1.1 million less than 1993, due to the fact that some very large projects were completed in 1993. A discussion ensued on grant money obtained by the City to help defray expenditures. Manager Pomeranz informed the Council that the General Fund reserves are double the level as prescribed in the Financial Policies. He then reviewed budgetary policies and noted areas where budget cuts were made, such as changing from self-insured to joining the AWC's benefit trust, thereby eliminating the need for a Sr. Risk Manager, and eliminating a vacant Record's Clerk position in the Police Department by purchasing new computer software. Manager Pomeranz advised the Council that, while many State and Federal agencies are unable to balance their budgets, the City of Port Angeles has revenues and expenses that are almost equal, with a reserve of $1.8 million. He summarized by 2613 CITY COUNCIL MEETING November 30, 1993 Public Hearing & Work saying the most important budgetary objective is to provide the highest level of Session - 1994 Proposed service to citizens, while maintaining the City's financial condition. This is best Budget (Cont'd) accomplish~cl by continually examining and reassessing City programs to assure that available resources are being used to their best advantage. Manager Pomeranz thanked staff for their diligent efforts in putting this budget together. Mayor Hallett asked how different the department requests were versus the budget recommendations. Manager Pomeranz responded that the requests varied; however, while the budget may not reflect all of the needs presented, he felt that all departments would agree that this budget will work and will be able to provide the basics needed in order to perform the job. Councilman-elect Doyle inquired as to whether the $90,000 for recycling programs, as shown in the Enterprise Funds chart on Page 9, reflected the true cost of recycling. Finance Director Godbey responded that this amount was in addition to the curbside recycling program; Pages 214-215 provide a fuller explanation. Manager Pomeranz felt that the budget served a number of key goals, as it is a policy document, a way for the Council members to set goals and reflect community priorities, an operational tool, a link with the general public, and a legally required financial planning tool. Mayor Hallett informed the Council that he had shared the document with various citizens and has received several favorable comments on it. The budget delineates major goals by heading, with specific objectives under each goal, and relates them to the appropriate department. The budget document ties everything together and makes it meaningful. Manager Pomeranz suggested that, as soon as the new Council is seated, time should be spent reviewing goals and objectives. There will be a training program provided by the staff for the new Council members. The Council will also be encouraged to participate in the AWC program held in January to help in the goal-setting process. Mayor Hallett inquired if other political subdivisions on the Peninsula had fmancial management policies. Manager Pomeranz responded that some do. Manager Pomeranz continued by explaining the Municipal Debt Capacity. The RCW's state that the public may vote to approve bond issues for government in an amount not to exceed 2.5% of the assessed value. Within the 2.5% limit, the Council may approve bond issues not to exceed .75% of the City's assessed valuation. Currently, the City's remaining debt capacity within the 2.5% limit is estimated at $13,598,000. Manager Pomeranz explained Councilmanic and Non- Councilmanic bonds, and Councilman Ostrowski requested an explanation of the 7.5 % total. Director Godbey indicated the Council has the flexibility to split the 7.5 % into three segments: the first 2.5 % would be for any City improvements, the second 2.5 % would be for park improvements, and the last 2.5 % would be for utility improvements. Mayor Hallett inquired if the chart on Page 14 was correct in stating that available margin for the 7.5 % total limitation was $55 million. Director Godbey replied that if the Council chose to issue general obligation bonds for utilities, the City could tap into 2.5 % of $55 million; however, realistically the $13 million was a preferred number to use. Discussion was held concerning long-term liabilities and the importance of the City maintaining its ability to pay. Mayor Hallett inquired why, under Revenue Bonds 1977 Water, a ($1,345,000) 1994 reduction was shown. Director Godbey responded that this amount will be refunded and rolled into the $10 million issue. Councilman Ostrowski would like to see the dates the G.O. Bonds will be retired. Director Godbey informed the Council that this information can be found under the detailed Debt Service Funds section. Manager Pomeranz reviewed the comparative tax information and informed the Council that the estimated property tax per $1000 evaluation is $3.34. This is less than the former $3.95 due to the reappraisal, and the reason for this was explained to the Council. A brief discussion followed on utility taxes. Mayor Hallett asked what kind of income could be generated if the City implemented the 0.20% B & O tax. Treasurer Ziomkowski thought it would be $1 million. Mayor Hallett inquired if this money could be dedicated to additional public safety, which it could. Manager Pomeranz reminded the Council that since the City has a utility tax and other revenue sources that other communities don't have, the B & O tax has not been implemented in an effort to support local business. Councilwoman Sargent stated that when new businesses look into settling in Port Angeles, the first thing they inquire about is a B & O tax. Manager Pomeranz briefly reviewed the revenue and expenditure charts. Councilman Ostrowski inquired as to why the difference between revenue at $61,000,000 and expenditures at $56,000,000. Director Godbey replied that it was due to the timing of some of the bond issues for capital projects, especially in the -2- 2614 CITY COUNCIL MEETING November 30, 1993 Public Hearing & Work utilities. Session - 1994 Proposed Budget (Cont'd) Manager Pomeranz moved on to the General Fund Summary and emphasized the need to study the budget carefully. While there might be some spending increases, there is an explanation. An example of this is PENCOM, where the City formerly had its own dispatchers and subsequently merged with the County and the Fire Districts. Employees from the other agencies were hired by the City, resulting in personnel being added to create a more effective system. However, there were also corresponding revenues and expenses. Examples such as this do have an impact on actual expenditures and make it somewhat difficult to make comparisons. Councilman Braun asked for an explanation of miscellaneous revenues. Manager Pomeranz responded that this category included moorage, Ediz Hook leases, space and facility leases and small collections. In reviewing the Summary of Revenues, Councilwoman Sargent expressed concern over whether gambling taxes were going to be raised, as the City is still receiving complaints concerning the last increase. Manager Pomeranz assured her that it was not expected that gambling taxes would be increased. The increase in revenues projected growth, not a tax increase. He informed the Council that several'owners of bowling alleys and other establishments have requested a meeting with some of the Council members and himself to discuss gambling taxes. They feel the gambling taxes are unreasonable and would like to see a reduction forthcoming. A brief discussion followed regarding Medic I fees. They were raised $.50 in 1991, and the second $.50 raise has never occurred for various reasons. The increase for non-residents will be minimal, and will result in only a $4,200 increase in revenues. Manager Pomeranz distributed a list of proposed fee increases. During the review of revenue estimates and assumptions, Mayor Hallett inquired as to whether the City had to maintain the library levy of $.50. Manager Pomeranz responded that, before the library district was established, the library was part of the City offices. The library would have to reabsorbed as part of the City function, which was not something he would be comfortable suggesting. The other cities in the district have a choice between maintaining their own library system or contributing $.50 per $1,000 assessed value, the same as the City of Port Angeles. Councilman Ostrowski inquired as to why there is a 23.5 % increase in property valuation. The valuations are set by the County, and the final figures are not yet in - this is an estimate. It was the general consensus that this was a significant increase. Director Godbey explained that by law, the County must update assessed valuations on an annual basis. This has not been done consistently and may explain the surge in the assessed values. There are a number of special levies, which total $520,000. Manager Pomeranz reviewed the impact of these, using the charts and graphs contained in the budget book. A discussion followed regarding the use of interest earnings to decrease levies. During the review of Intergovernmental Revenues, Mayor Hallett inquired into the status of the Criminal Justice Funding. Manager Pomeranz explained that the decision to implement the tax is at the discretion of the County. Police Chief Ilk stated that the Law and Justice Council set up by the County Commissioners had its first meeting last week and voted 19-1 to have the Commissioners pass this proposal. Further discussion ensued on the allocation of Criminal Justice Funds, if and when the tax is passed by the County. Manager Pomeranz felt a work group was needed · to discuss with the County a variety of issues, one of which is the Criminal Justice Funding. In looking at the General Fund Expenditures by Department, the Council was interested to note that the revenue generated by property taxes did not even cover the cost of maintaining the police department. It is obvious that the City needs other revenue sources, which explains why utility taxes, gambling taxes, etc. are necessary to the operation of the City. Manager Pomeranz reviewed budgets by department. The Council members felt that allowing $5,000 for their travel expenses was on the low side. Many of the meetings they attend, such as AWC and Multimodal Transportation Facility meetings, are held in Olympia. This account was raised to $6,000. Under the City Manager section, Page 63, Councilwoman Sargent inquired as to why nothing had been done regarding promoting Port Angeles as a retirement city. This was intended to be a Chamber of Commerce project. Councilman Schueler inquired as to why the City Manager's budget for contingencies shOwed such an increase over last year. Manager Pomeranz explained that the cost of living increases, in excess of those planned for, are all -3- 2615 CITY COUNCIL MEETING November 30, 1993 Public Hearing & Work consolidated under City Manager in the form of contingencies. He further explained Session - 1994 Proposed that this money could be used for flexibility in making budget changes. For Budget (Cont'd) example, by adding $1,000 to Council's travel expenses, this contingency budget. would be decreased to $33,000 to maintain a balanced budget. Under City Manager Summary of Expenses, Councilman Hulett questioned why Charges for Services increased from $71,000 in 1992 to $114,000 in 1993 and $103,000 for 1994. Manager Pomeranz summarized what was included in this amount, which included the City newsletter which had been in a different place in the past. Director Godbey also informed the Council that part of these funds were for city-wide training that was not used in 1993 and, therefore, reappropriated in 1994. There used to be a non-department budget, which was eliminated. All these expenses were then placed under the City Manager's budget, even though they have nothing to do with that department. The City Attorney's budget was very much the same as last year's. The only real increase is in mumcipal court costs, which the City has no control over. A brief discussion followed on other professional services, and what is covered by miscellaneous services. Manager Pomeranz went on to review the Finance Department budget. Councilman Ostrowski asked if personnel had been added as was previously requested. Director Godbey responded that no personnel had been added; however, a person is being shifted out of the General Fund into the Information Systems Fund to help with the work load. She explained that 69 % of her department is funded by Proprietary Funds. Information Services is an internal service fund, which means all of the costs are charged to all departments, so that the function is self-supporting. Manager Pomeranz explained the restructuring of the Finance Department to better utilize the existing personnel, and a proposed contract with Diversified Industries to man the mailroom and copyroom and free up office personnel from xeroxing duties. The Council was very supportive of employment possibilities for the handicapped. Councilwoman Sargent wished to know why the overtime budget had been so high. Director Godbey agreed that it had been excessive and will be curtailed in 1994. The overtime for 1993 had been high due to system conversions, especially utility billing. This has been completed and hopefully, by staff realignment, the overtime will be dramatically reduced for 1994. Manager Pomeranz reviewed the Fire Department budget, and informed the Council that Chief Glenn had done everything possible to hold the line on expenditures. Most of the increases are attributed to the bargaining unit agreement, cost of living increases, and health and medical increases. There is no new personnel. A large increase is seen as a contribution to Pencom. In the past, this was a Police Department expense; after some analyses, it was determined that the Fire Department was also receiving benefits from this program and should therefore share in the costs. Councilwoman Sargent inquired as to why there was such an increase in Administration Expenditures. Manager Pomeranz reminded the Council that being the City was no longer self-insured the LEOFF I claims were going to be absorbed by the Police and Fire Departments. Manager Pomeranz informed the Council as to what is covered by the capital outlay, which includes life packs, telephone cable, pagers, etc. Manager Pomeranz then discussed the budget for Parks and Recreation. Councilwoman .Sargent asked why the Park Facilities, under Expenditure by Program, showed a decrease of almost $100,000. Finance Director Godbey explained that, under the Parks Department, a half-time seasonal employee was eliminated, with an additional half-time seasonal employee being transferred to the recreational activities fund, which freed up a significant amount of money. Also, it was discovered that the City's worker's compensation rates were too high, and that helped decrease the fund somewhat. It was further explained by Parks and Recreation Director Brodhun that Cemetery expenditures were down because a capital project was completed this year, reflecting a decrease in the 1994 budget. Councilman Ostrowski inquired as to whether the position of Aquatics Manager was eliminated. Director Brodhun replied that the department was reorganized. The Cemetery Manager position was deleted and the responsibilities given to the Parks Maintenance Superintendent. Last year, the Pool Manager's position was cut and split into a Recreation Coordinator and Aquatics Coordinator position, under the leadership of the Recreation Manager. Councilwoman Sargent inquired as to whether or not the half-time Sr. Center Office Assistant position was vacant. Manager Pomeranz replied in the affirmative, and indicated this would be a position for the Council to look at regarding freezing. Councilwoman Sargent felt this was at the discretion of the City Manager; however, -4- 2616 CITY COUNCIL MEETING November 30, 1993 Public Hearing & Work Manager Pomeranz urged the Council to be involved in this decision in a general Session - 1994 Proposed sense. Councilwoman Sargent felt that the Council was trying to say that if an Budget (Cont'd) opening come~ upaadtho, Cit~ can get by without filling it without jeopardizing the level of service, then a fr~eze should be seriously considered. Councilman Schueler asked if the increase in fees was a recommendation. Manager Pomeranz replied affirmatively; no final decisions have yet been made but these are built into the proposals. Concerning the Planning Department, the only increase noted was in personnel. This is due to the fact that the Growth Management Funding is being eliminated in July, 1994. Next year there will be no State money, so 100% of that employee's salary will have to be absorbed by the General Fund, or the position will have to be eliminated. The amount this year is not being taken out of the General Fund, but is part of a grant which will not be available next year. ADJOURNMENT: Mayor Hallett closed the public hearing and adjouf.~, .~ ting at 9:12 p.m.