HomeMy WebLinkAboutAgenda Packet 11/12/2013City of
Port Angeles
2014 Budget Workshop #2
November 12, 2013
Agenda
• Review & Response to Questions & Comments received from
Mayor and Councilmembers
• Additional Questions & Comments from Mayor and
Councilmembers
• Direction from Mayor and Council regarding changes to the
2014 Proposed Budget for consideration at 1" Reading on
November 19th
• Additions and/or deletions to proposed funding in the City
Manager's Recommended 2014 Budget
• Next Steps
11/12/2013
1
Response to Questions &
Comments from Council
1. How do we plan on increasing reserves? (Kidd)
a. The General Fund unassigned fund balance ("Reserves') will
receive funding from year-end savings in the General Fund
operating budget. No direct funding of additional resources
are anticipated at this time.
b. Council will need to adopt the appropriate policy amendment
to increase the minimum General Fund unassigned fund
balance ("Reserves") from the currently authorized 10% to
the proposed 25% threshold. We anticipate Council action in
early 2014 on this issue.
Response to Questions &
Comments from Council
2. On page 6 of the Budget it notes the proposed use of
$27,391,131 of reserves versus $21,441,964 in the previous
year. Why the increase? What do our reserves look like for
2014? (Bruch)
a. Use of reserves in 2014 will be less than the $27.3 Million currently
included in the City Manager's Budget. We did not budget revenues
for the Landfill Bluff Stabilization Project as we have not finalized the
method of funding but we did budget the expenditure of $19.5
Million. We anticipate that reserve spending will reduce by $15.5
Million once we finalize the landfill bluff funding plan.
b. Preliminary year-end forecasts for selected reserves shows the
following:
,, Gen. Fund Unassigned @
$4,152,206
Economic Development @ i,
fi�$520602
REET 1+REET li @
-
Electric Fund @
$2,566,063
Water Fund @.
$10,634,939 -
Wastewater Fund @
53,420,513 .. -
11/12/2013
2
Response to Questions &
Comments from Council
3. Where is the $10,000 reduction in the Council Budgetfrom
2012 to 2013? (DiGuilio)
a. With the passage of the Ordinance No. 3468, Council
approved two motions as noted below:
1. It was moved by Di Guilio and seconded by Bruch to Reduce the
2013 City Council Travel and Training Budget by $ 1, 000 and to
increase the 2013 Health and Human Services Budget by $ 1,
000. Motion carried 6 -0.
2. It was moved by Di Guilio and seconded by Downie to Amend
the 2013 Recommended Budget to revise the property tax
collection to $4,228,000; reduce funding for travel and training in
the City Council Budget by $2, 000 and transfer those funds to
Health and Human Services and allocate $28, 000 of the
additional property tax for Health and Human Services for a total
funding to Health and Human Services of $30, 000 as provided in
the Revised Exhibit to the Budget Ordinance. Motion carried 6 -
0.
Response to Questions &
Comments from Council
4. Need to provide Health & Human Services funding at same
level as in 2013? (DiGuilo, Bruch, Kidd)
a. With the adoption of the new utility rates for 2014, the
General Fund will be receiving additional utility tax estimated
to be $449,100 less a $60,000 sequester for Nippon testing
phase utility tax loss.
b. Included in our presentation tonight, is the City Manager's
recommendation on allocation of the additional revenues
noted above.
c. For Health & Human Services, the City Manager is
recommending a restoration of funding at $35,000 for 2014
11/12/2013
3
Response to Questions &
Comments from Council
5. Will medical rates actually be 2% lower in 2014 Due to
AWC becoming self-insured? (DiGuilo)
a. We budgeted medical & dental premiums at the same rate for
2014 as currently being paid in 2013. The 2% discount that
the City has now qualified for will be effective in 2015.
b. Teamsters sworn employees (Police) are covered by
Teamsters medical & dental plan and will see a 3.0% increase
for only the medical premium.
c. Teamsters non -sworn employees (civilian employees in Police
+ PenCom) are covered by Teamsters medical & dental plan
and will see a 3.0% increase for only the medical premium.
Response to Questions &
Comments from Council
6. How much do we currently pay in economic development
contracts? (Bruch)
a. In 2013 we budgeted the following:
1. Chamber of Commerce $309,000 (1)
(1) Originally budget of $265,000 had a $44,000 increase approved by council In
early $2013 but was not included In earlier2013 Budget Amendments. Will
be included in 2013 Budget Amendment #3.
ii. Economic Development Council $15,000
ill. Port Angeles Downtown Assoc, $85,000
a) Approximately $65,000 from Off -Street Parking Fund #650
b. In 2014 City Manager Recommended Budget:
i. Chamber of Commerce $265,000
ii. Economic Development Council $15,000
iii. Port Angeles Downtown Assoc. $85,000
11/12/2013
4
Response to Questions &
Comments from Council
7. Remove the budget for Chamber of Commerce, Economic
Development Council and Downtown Association, Use the
funding to improve our infrastructure that will bring
people in, like Civic Field or use it to offset our utility rate
hike for low income folks. (Bruch)
a. The funding for the Chamber of Commerce contract comes
from the Lodging Tax fund —those funds can not be used to
offset utility rates for low income.
b. Funding for the Economic Development Council and the
Downtown Association comes from the Economic
Development Fund. Resources in that fund are restricted for
economic development purposes that would exclude utility
rate subsidies for low income. Capital improvements for
Economic Development related assets would be allowable.
Response to Questions &
Comments from Council
8. Concern over City funding for economic development. Concern over multiple,
disjointed voices could create confusion and ineffective economic development effort.
Port of Port Angeles should be lead agency for economic developmentfor City. (Bruch)
a. The Economic Development Fund is administered in accordance with the Council -
adopted Economic Development Fund policy.
1. Infrastructure that enhances the tax base and creates new employment opportunities
are priorities.
b. Considering the limited resources in the fund, using the fund for operations and
maintenance is not recommended.
c. The Economic Development Fund and its associated policy will be included in our
discussions on the Long Range Financial plan in early 2014.
d. The City works with over 8tourism and economic development entities. The City
wants to develop a more unified and cohesive voice for economic development or
Port Angeles.
e. The Port of Port Angeles is a key leader in economic development but they cannot
focus solely on the City of Port Angeles. A dedicated City economic development effort
ensures investment in our infrastructure, tax base, local employment opportunities
and provides direct benefit to the City of Port Angeles.
11/12/2013
5
Response to Questions &
Comments from Council
9. Where do we have opportunities for partnerships? Can the partnerships be utilized to
help fund needed repairs to jointly utilized facilities? (DiGuilio)
a. Streets -- we regularly share equipment between City, County, and State
street departments thus avoiding rental or purchase costs.
b. Recently the City jointly worked with the State to fix the 5th and Lincoln
intersection, and the Truck Route pavement improvements.
c. I have asked City operations to open discussion with the Sequim
Operations departments to determine where we can combine efforts for
economies of scale, and to develop/share lessons learned in our utility
operations.
d. We will be conducting monthly Joint Solid Waste Advisory Board
meetings (PA, Sequim, County) versus the 1-2 meetings per year, to
better share opportunities and constraints associated with the transfer
station, the upcoming landfill bluff project and recycling opportunities.
Response to Questions &
Comments from Council
9. PART II Where do we have opportunities for partnerships? Can
the partnerships be utilized to help fund needed repairs to jointly
utilized facilities? (DiGuilio)
a. 2011- City Parks/County Parks Shared Resource Assessment
a. Things we Share Now
a. Equipment -Park Equipment/Bleachers
b. City Storage at Fairgrounds
c. Parking Lot Usage -Volunteer Field/Court House
d. Use of Lincoln Park for Fairgrounds
b. Parks/County Potential Areas of Shared Activities
a. Share Employees with Certifications:
a. Playground Inspectors/Arborists
b. County Use of City Greenhouse
c. Bulk Purchases for Cost Reduction/Shipping
d. Schedule Inspectors at Same Time- elevators/Fire Alarms/ect.
e. Training
c. Continue to Improve on Facility Use Agreement:
a. School District/City Parks
11/12/2013
6
Response to Questions &
Comments from Council
10. Why did the Fire Department Administration division
increase 11.6% in personnel benefits? (Collins)
a. The Fire Department's Admin Assistant retired in 2013, and a
new employee is budgeted in 2014.
b. We budgeted the new Admin Assistant assuming medical
benefits for an employee, spouse, and 2 dependents. The
employee who retired only had employee coverage.
Response to Questions &
Comments from Council
11. Why are Fire Department Administration personnel
benefits higher than salaries & wages? (Collins)
a. This division includes the additional medical payments to the
six (6) LEOFF-I (Law Enforcement Officer and Fire Fighter)
retirees. These benefits are budgeted at $109,000 for 2014.
11/12/2013
7
Response to Questions &
Comments from Council
12. 1 would like some discussion over firefighter staffing levels?
(Bruch)
a. The Fire Chief would be more than happy to discuss staffing
levels within the Fire Department.
b. Discussions over service delivery, including staffing levels, will be
part of the Program & Services discussions with Council in early
2014 as we finalize the Long Range Financial Plan
c. It is important to note, that following the elevation of the Fire
Chief to City Manager in 2012, followed by the promotion of the
Assistant Fire Chief to Fire Chief in 2012, the City Manager
elected to not re -fill the vacant Assistant Fire Chief position in
2012 or 2013. Once a retirement occurs in the Fire Department,
we will fill the Assistant Chief position and eliminate a line
position.
Response to Questions &
Comments from Council
13. Can Finance re -assign the work proposed for the vacant
position that is planned to be filled? (DiGuilio)
a. The position to be filled resulted from a departure of an
existing employee. The redesigned position will provided for
a dedicated back-up for three areas (1) payroll; (2) accounts
payable; and (3) utility billing. In addition the position will
continue to perform the work previously done on
miscellaneous revenue receipting (all non-utility revenue).
b. In 2012, Finance lost one senior accountant position which
translated into a 25% reduction of staff with no corresponding
reduction in workload.
11/12/2013
8
Response to Questions &
Comments from Council
14. Is the increase in the planning budget due to Nathan going
to full-time in the General Fund? (Bruch)
a. Yes, the increase in the budget is for the transfer of the
portion of the Director West's salary that was previously paid
from the Economic Development Fund.
b. Discounting the addition of the salary and benefits associated
with the transfer of Director West's salary, the Planning
budget has a net decrease in spending authorization.
Response to Questions &
Comments from Council
15. Planning lost one position. Is this a good idea? I think
Planning needs more staff. (Bruch)
a. Multiple departments in the City have lost positions and i am
certain that each of those departments would have benefited
from retaining those positions.
b. Unfortunately, the City's financial position dictates that we
must operate in a manner where expenditures align with
revenues.
c. The Community & Economic Development Department has
other needs that would likely be prioritized before a new
planning position. These would include: hearings examiner,
cultural resource support, code compliance resolution
funding and implementation resources.
11/12/2013
9
Response to Questions &
Comments from Council
16. Buy local. In 2012, we spent over $10,000 at Office Depot
and $24,000 at Quill Corporation. We should have a policy
regarding buying local first and review our purchases to
support local stores first, if possible. (Bruch)
a. The City walks a "tight line" between the emphasis of buying
local and getting the lowest possible price for supplies
needed by the City. The City's current policy (adopted in
2012) provides for a 5% variance in price to allow for selection
of a local provider who may not have bid/quoted the lowest
price.
b. The City Manager, assisted by Finance, will provide a
summary analysis of purchasing by zip code to help further
assess our efforts on the "Buy Local" program.
Response to Questions &
Comments from Council
17. Humane society cost per animal. I am not really in favor of
reducing the amount as this is a service that government
should support. (Bruch, Kidd)
a. Police Chief Gallagher has had the opportunity to review the
counter -proposal from the Humane Society that would put
funding at $50,000 (a reduction of $4,000 from 2013),
b. One suggestion from the Police Chief is that the contract be
for a three (3) year term rather than a single year. In that
manner, there would be greater certainty for both the
Humane Society as well as the City of Port Angeles.
11/12/2013
10
Response to Questions &
Comments from Council
18. How much does it cost us to run all fluoridation of our
water? Please detail costs. How much would it cost us to
break our contract? (Bruch)
a. The annual cost of adding fluoride to the City's drinking water
is $12,000. The cost is paid by the Water Utility.
b. To terminate the contract, the City would need to reimburse
the Washington Dental Foundation $433,000 as provided for
in the contract, plus indemnity, if any as well as potential
attorney fees.
Response to Questions &
Comments from Council
19. New budget is great. Need to find a method to provide more
budget detail in each major section (ex.: refer to website).
(DiGuilo)
a. As we progress with our new format, in the final 2014 Budget we
will see:
a. Background and summary information on the City's revenue sources
and expenditure patterns; departmental goals and objectives +
performance outcomes from 2013; and major changes in
departmental funding/operations from 2013.
b. For 2015 budget development, we hope to see the following in the
City Manager's Recommended Budget:
a. Application of the Long -Range Financial Plan to the budget development
b. Economic analysis of current budget and projected short and long-term
impact on future budgets;
c. Listing of proposed contracts with consultants intruding amount, purpose
and timeline;
d. Proposed major projects for undertaking by each department not}ng
anticipated outcome, timeline and costs.
11/12/2013
11
Response to Questions &
Comments from Council
20. Budget - it is just general enough that it is hard to know
what exactly is being paid by each fund and category. Not
sure how to make it more useful, but I was frustrated at not
really what to change since everything is so general.
(Bruch)
a. As noted on the previous slide, we plan on a series of
significant enhancements as we progress through 2014. In
addition to the "budget book" we also want to enhance our
budget status reporting both on paper/electronic format as
well as budget briefings for Council.
b. A primary focus will be analysis of all utility funds to allow
Council to be better informed as to the nature of the
revenues, expenditure trends, debt requirements and
operational changes to reduce/limit future cost increases.
Response to Questions &
Comments from Council
21. I would like some discussion regarding the COPS grant that
has been authorized but not yet accepted by the City.
(Bruch, Nelson)
a. Grant period began September 1, 2013. We have 90 days to
accept or reject the grant.
b. The grant provides $125,000.00 over three years and requires
we hire a post -9/11 veteran.
c. The city match would be just under $120,000.00, or
approximately half the cost of an entry police officer.
d. Police Department recommends that we accept the grant but
delay hiring until 2015.
11/12/2013
12
Response to Questions &
Comments from Council
22. I would like some discussion regarding a policy for REET I
and REET II for one-time uses of funds. (Bruch)
a. in discussions as part of the two Council Long -Range planning
Workshops held earlier this year, Council gave preliminary
direction on future use of Real Estate Excise Tax (REET)
revenues.
b. The preliminary direction that will be finalized by Council
action in 2014, will focus on the following main points:
i. Future use of REET revenues should be limited to either grant
match for eligible capital projects or to "cash -out" an eligible
capital project.
ii. Only in the rarest of circumstances will Council utilize REET
revenues for debt service.
a) In such cases, no more than XX% of the total REET revenues would be
pledged for debt service.
Response to Questions &
Comments from Council
23. How much money are we spending on outside
consultants? (Bruch)
An initial report, shows the following recent use of expenditures coded
to "professional services" by the City for the a nearly 3 -year period of
January 1, 2011— November 8, 2013 totals $11,271,783.
b. A partial listing of the types of expenses paid under this category
includes:
i. Arbitrage rebate calculations & analysis
II. Printing/mailing of utility billings
ill. Public defenders & conflict attorney costs
Iv. Sports referees & officials payments
v. Engineers & architects
c. We would recommend further discussion with Council to better define
what we are wanting to look at so that we can refine our data search to
obtain the specific, relevant data to answer Councils questions and
concerns.
11/12/2013
13
Response to Questions &
Comments from Council
24. The issue of a hearings examiner has been raised
often. How many times have we had issues that
should be addressed by a hearings examiner this year,
and last? (Bruch)
a. Over the last two years (2012, 2013) we have had 10 quasi-
judicial matters per year that could have been referred to a
hearings examiner.
b. Based on a comparative review of comparable communities
and their compensation rates for hearings examiner services,
we estimate the annual cost would be in a range of $10,000 -
$20,000 per year.
Response to Questions &
Comments from Council
25. Parking planning for the future -- should we be using the
parking $ to save up in 20 years for a downtown parking
structure? We don't need one now, but in 20years when
the fund can pay for it, we might need it and it seems like a
good use of those dollars. (Bruch)
a. Currently, parking related revenues are dedicated to helping fund
payments to the Port Angeles Downtown Association.
b. Recent revenue history shows the following parking related
revenues for the City:
i. 2007 $22,208
ii. 2008 14,450
iii. 2009 22,051
iv. 2010 27,745
v, 2011 21,441
vi. 2012 26,116
vii. 2013 ytd 24,547
11/12/2013
14
Additional Questions &
Comments
• Questions
• Comments
• Request for Further Information
Additional Utility Tax Revenue
to be Added to 2014 Budget
sra! Fut7dnagReervisBudgeted c.ty
ge Ma
Revetlu OP
Expenditures
Net
Fund Balance) -• Unassigned
N of Gen. Fund Expenditures
REVISED GENERAL FLJND:
Beginning Revenues
Revised Reesenues:
518,929,100 $19,153,800
18.866.850 19, ].60, 7 50
$62,250 $3,050
$4,089,955 $4,093,006
22.es% 22.369-6
$18,979,100
Elea* Wilily Tax 754,400
Ad). for Nippon Testing (64000)
Water Utility Tax 65, 800
Wastewater Utility Tax B3700
So tie Waste--Ca/lection Tax (7000)
Solid Waste --Transfer Tax 46,000
Stormwater UtlEty Tax 6400
Reduce Cost Allocation from Utilities to Admin. MECO)
Reduce Cost Allocation from Utilities to PW (91.800!
TOTAL IVEW REVENUES
234700
TOTAL Revised General Fund Revenue $19,153,800
11/12/2013
15
City Manager Recommended
Uses of Additional Utility Tax
,tee
REVISED GENERAL FUND:
Beginning Expenditures
Revised Expenditures:
Website Hosting & Maintenance 1,500
Health & Human Services Funding .35,000
Gen, Fund contribution to low income utility subsidy 60,000
fTAllocation Charger 1,900
Additional Funding for Litigation 15,000
Correction of Staffing Hours in Police 10,500
Humans Society Additional Funding to $50,000 total 8,300
Move Engineer Costs t7irectlyto Stormwoter (9s,300)
Added Funds — Vern Burton Roof (GF $150,000) 50,000
City Nall Front /Public Parking tot Re -Paving 100,000
Civic Field New Boller 50,000
Civic Field Perdol Funding for Light Replacement 60,000
TOTAL NEW EXPENDITURES
TOTAL Revised General Fund Expenditures
Revised City
Managerr,Budget
5]8,866,850
193,900
$19,160,750
Direction from Council
• Changes to 2014 City Manager Recommended Budget:
• Need consensus from Council on what changes to incorporate
into the 2014 Budget for 1" Reading
• Changes to Revenue
• Increase
• Decrease
• New Revenue
• Changes to Expenditures
• Increase
• Decrease
• New Programs or Services
11/12/2013
16
Remaining Budget Calendar
• November 19th Regular Meeting
• 1St Reading on 2014 Budget
• Public Hearing on 2014 Budget
• November 26th Workshop
• Potential Date for additional workshop
• December 3rd Regular Meeting
• Continuation & closure of Public Hearing on 2014 Budget
• 2nd Reading & Adoption of 2014 Budget
• 1St Reading on 2013 Budget Amendment #3
• December 17th Regular Meeting
• 2nd Reading & Adoption of 2013 Budget Amendment #3
11/12/2013
17