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HomeMy WebLinkAbout2012-08-21 PreCouncilMeridian City Pre-Council Special Meeting August 21, 2012 A special pre-council meeting of the Meridian City Council was called to order at 6:00 p.m., Tuesday, August 21, 2012, by Mayor Tammy de Weerd. Members Present: Mayor Tammy de Weerd, Keith Bird, Brad Hoaglun, David Zaremba and Charlie Rountree. Others Present: Jaycee Holman, Bill Nary, Todd Lavoie, Stacy Kilchenmann, Mike de St. Germain, Clint Dolsby. Item 1: Roll-call Attendance: Roll call. X David Zaremba X Brad Hoaglun X Charlie Rountree X Keith Bird X Mayor Tammy de Weerd De Weerd: Okay. I will go ahead and call this meeting to order. It is a special meeting of the City Council. Today's date is Tuesday, August 21St. It's 6:00 p.m. I will start with roll call attendance, Madam Clerk. Item 2: Adoption of the Agenda Adopted Hoaglun: We have two items, public hearings on our proposed budget and amended budget and we also need to add item 5, which is an executive session under Idaho Code 67-2345 (1)(d). So with that I move adoption of the agenda as amended. Rountree: Second. De Weerd: I have a motion and a second to adopt the agenda as amended. All those in favor say aye. ALL AYES. MOTION CARRIED. Item 3: Public Hearing: FY2013 Proposed Budget of $81,186,803 Kilchenmann: Good evening. So we have the biggest crowd ever. I have a fairly short presentation, so what I tried to do is just -that is all Todd's presentation, the long part. I only have 22 slides and one is the beginning and one is the end, so they don't count. I will go through this fairly quickly and I did just try to pick out highlights. So I am going to go fast so if you have a question, please stop and interrupt me. Our budget this year is $80,186,803 -almost evenly split between the general fund and the enterprise fund. That does appear to be a fairly substantial increase from the $60 something million we had last year to $80 million. So I will go ahead and highlight what factors make that happen. I always want to remind you that we do do transfers during the year. All of these transfer occur when you get your financial statements there at the bottom line Meridian City Council PreCouncil Meeting August 21, 2012 Page 2 of 10 called transfers so you only see the true cost of that department, the bulk of the transfers of course are transferring that admin functions of finance, IT, HR, construction manager and Legal to the enterprise fund and a small portion of the Mayor's staff to the enterprise fund and again we always deal with the issue of carry forward, which is one reason why our budget always looks larger this year and I want to say that when we do the carry forward we actually calculate that around June. So what Todd does is he looks to see how much of our capital and some very large operating consulting projects have not been completed and he just carries all of that forward. When we get through the audit he will go through and see what did we actually spend because obviously we are going to spend more in June, July, August and September and reduce the carry forward. So what we carry forward now will be reduced when we do probably about December, January. So that number is inflated just to make sure we don't miss anything. Again, of course we talk about the use of fund balance and that is when we have chosen to take things we have put in our capital improvement plan, we have said those are items we are going to use fund balance for. So if you look at the budget as a whole -again it is $80 million and increase $14 million from FY12 - $12.5 million of that is because of the increase in capital and carry forward. So almost the whole bulk of it. Again, we are talking about the whole budget here, so if you look at percent of change year over year, our personnel increased just two percent, which I think is pretty good. Our operating increased 7 percent, but I am going to go through that when we do each fund. Most of that is onetime items and then depreciation in enterprise fund. In enterprise fund, depreciation increased $1.56 million between 2012 and 2013 and we don't talk about depreciation -when we sat down and did the budget workshop we did it on a cash basis. We do put it in the hearing notice. That is because we appropriated and we want to stick it on the financial statements. So that always creates a little bit of confusion. So again our capital is where the increase in this total budget is - it increased 78 percent. Our carry forward number from the amount that we carried forward last year increased 59 percent and of course some of that has been carried forward for more than one year. So that is just kind of a look at the components of our budget. Personnel and operating didn't change much. The piece that changed is that capital piece. We are going to start with the enterprise this year. So the 2013 budget is $41.1 million, last year their final budget that Todd will talk about briefly is $28.7 million so that is an increase of 43 percent. So I am going to start through each component so we can look at operating costs first. If we do not put depreciation in they actually decrease 10 percent. When we add that big depreciation back, operating cost increased 8 percent. So we removed $1.12 million in consulting funds when we went through the base budget. Again we increased the depreciation by $1.46 million and then there are $16,015 about in enhancement and one time operating items. So the capital increased 131 percent and capital makes up 39 percent of the enterprise fund budget. Carry forward increased 8 percent. Again that piece I talked about that the actual carry forward will be much less. So when we look at each fund when we are finished going through the base budget line items and we came to the workshop and we sat down to look at what we could do this year. This is a look at what the enterprise fund has looked like the last few years. So after we went through and did the base budget, they had $1.12 million available for enhancement requests. We took their total revenue and their total cash revenue minus their total cash operating; they were in the Meridian City Council PreCouncil Meeting August 21, 2012 Page 3 of 10 black $10.3 million. So to cover all of that capital that they have in this year's budget, we use the operating income plus $5.7 million of fund balance to cover their capital request; again they came to you earlier in the year, talked about their capital improvement fund, what they would take out of operating, what they would need out of fund balance and in their operating they used $4.5 million for their carry forward. So again this looks at that carry forward calculation, so I just took this off of the June 30~" financial statements and you can see their total budget in orange, what has actually been completed year to date and there is some operating carry forward, this is just capital. Then if we look at their budgeted revenue, we planned about a two percent increase and the number of utility accounts boosting water and sales usage, no increase in fees, the bulk of their money comes from the sewer and the bulk of their cost is in the sewer. So I am going to go through their enhancements fairly rapidly and I am just going to highlight the bigger ones. I am not going to go through every single one of them. Personnel and operating they requested $874,000. The main items were two new FTE's one for administrative support and admin and one for an electrician at Wastewater and then they had some consulting money for studies and plans, principally source water master plan, aquifer recharge and irrigation for $410,000. So new capital - Water they asked for $6.8 million and some of the bigger items are water main replacements for $1 million, well treatment which is composed of a few different items at $1.2 million, ground reservoir for $3 million and money for land acquisition for reservoir booster well in north Meridian for $500,000. Sewer - ask for $8.7 million in enhancements -there are a lot of plant improvements for odor control, permit preparation upgrades, system efficiencies, most of those together and that is $4.6 million. A lab expansion for half a million. Anew wastewater treatment plant for $730,000, money already spent on reclaimed water program $180,000 and then of course the ongoing sewer and main line sewer replacements for $2.7 million. When you look at the graph you can see again that sewer takes the big bulk of money. So that is the enterprise fund. The general fund's budget is $39.1 million compared to last year's final budget of $37 million so we have a big increase in carry forward, which the bulk of that is the maintenance shop because we just started and improved that maintenance shop just a month or two before Todd calculated the carry forward, so obviously we are going to take that into next year increases, the FY13 budget and that area. Our personnel increased two percent. 1.5 new positions and then a 1 point salary adjustment plus the step plan moves and the police step plan moves. Operating increased 7 percent, however, the bulk of that is a onetime payment of $700,000 to the Rural Fire District for Station 5, so we have been collecting impact fees all this time. They built the station and now we are just going to turn around and just pass those impact fees back to them. We are collecting them and passing them back to them for building that station. So it is actually -all out of the impact fee fund. Then we did increase the building inspector fees because we did put a little boost for activity - boosted that up to about 2 points, so we had to increase the contractor inspector fees and then we got about $700,000 for replacement vehicles and computers. So when we look at the budget history, we can see that our operating and personnel they are staying pretty even, if you compare the two years 13 to 12. It is that boost and carry forward. So when we got to the budget workshops and we looked at what we had for discretionary revenue, we had about $1.5 million available. We used $2 million of fund Meridian City Council PreCouncil Meeting August 21, 2012 Page 4 of 10 balance for a capital item, which I will get to. Which we had already decided to do in our capital improvement plan and then we are using $5.5 million for the carry forward. I am going to talk a little bit more about our revenue for the general fund. So for both funds, again, we said moderate 2 percent growth and we looked at things like sales tax, revenue sharing, new construction, building permits. Our revenue for the last few years have been pretty flat lined. Our sales tax revenue really hasn't changed. That is our next biggest source of revenue after property tax. Court revenue, franchise fees, none of that has really changed over the last three or four years. So when we did our forecast we are trying to ignore any kind of growth spurts, so we are in a little growth spurt right now and have been for a while. So our strategy is to ignore potential growth spurts like that and when we do get the funds, we try to put them into fund balance and that in turn decreases the need to use operating money for some capital improvement items. We did decide to take the property tax increase and did that for several reasons, one was to have the ability to finance our tenure capital improvement placement and maintenance plans. One of the biggest items which is the need eventually for a new fire station in south Meridian to support our current level of service, in other words we didn't add new police staff, we didn't add new fire staff, but we just need to be able to support the level of service that we do have. We needed to handle costs that are pushed to the city by other governments, as other governments are feeling pushed and tightened, it all flows down hill and guess who is the bottom? We have no one to push it to. We are at the bottom. There are changes made by federal and state government that affect our property tax statutes, our health insurance that we are uncertain about. So for all of those reasons we did decide to take the three percent increase. So just looking for example at our capital improvement plan and this is just a big broad 30,000 foot look at it, we trimmed capital improvement plan, went through it and tried to keep key items in there and we still at our current level of revenue couldn't find any answers. So the first graph shows that yellow line. This is where our unrestricted fund balance reserve needs to be. So here is where we are, we are at the end of 2012, we have a great big black bar. If we did everything in our capital improvement plan, when we got to FY22 that is where we would be. Obviously the unrestricted fund balance is below zero and we wouldn't let that happen, but it is just kind of a look that we will have to stretch these items out and the one on the right shows where the bulk of the money would be spent. Again that is combining all of the funds. So a lot of the park, well most of the park capital improvement plan, theirs is out of impact fees. So just kind of looking at what happens to property taxes, we have a foregone amount of $4.1 million that we are not going to take, that we could have taken. I think we have made a decision in the city that will never go back and take that. When the Ada County Assessor did the first presentation to you, taxable value had increased 8.5 percent, well when it got all said and done it got actually increased 4 percent, not because of the value of the property but because of some exemptions that were not reported at the time he came and spoke to you and I am going to talk a little bit about some of those in a minute. So again the numbers are still preliminary, still changing. They don't have the utility values in, they just have an estimate in. So we don't know for sure what our levy rate will be. Right now it is sitting at an increase of about $7.26 per $100,000 value. So we are asking for $20.5 million, which doesn't even cover our public safety budget. That is made up of a new construction value of $570,000, annexation value of $2,900 -that could buy a Meridian City Council PreCouncil Meeting August 21, 2012 Page 5 of 10 computer or two and a base increase of $580,000. That tax burden split for last year, by 2011, I mean tax for 2011 was residential about 57 percent and commercial about 42 percent. So that is - I don't have the numbers for this year. So there is a couple of things that came in - a couple of pieces of legislation that have really affected us or they have affected the composition of how taxes are paid in our city and other cities in Idaho. One of them is the speculative land. HB 645 refers to the speculative land statute or exemption that has been in place since 2009 and then other one just went into effect and it is the site improvement exemption or HB 519. So when I went back and got the value of those exemptions, and I looked at it for those four tax years, it was over $135 million, so that is a pretty big shift in property tax. That is a shift of $1.3 million. So that means these pieces of property, these commercial development pieces of property are not paying that tax. Somebody else is paying that tax. Just to look at the impact of the one that passed this year, the site improvement legislation - I picked out one parcel - it is a two acre lot in a commercial subdivision and you can see it went from $900,000 from last year and with the new exemption it is now valued at $360,000. So that is a big change and a big shift in tax. These two exemptions alone changed our levy rate from .0004 to what we think might be the .00045. So then I looked at residential property to see what the impact of the tax change would be for them and again I took a representative sample of houses and I guess I won't go through each of the properties - the higher end homes, their values seemed to increase more, the homes that are about in the $150,000 range, decreased $11; the one that is $100,000 didn't have an increase. So it just kind of varied from area to area. Another legislative impact is they lowered the housing to $83,000 so they lowered it about $10,000. I just looked to see what the medium sales price for a home in Meridian was and it was $159,000 for the year ending July 12t", so about 2.5 percent, which is kind of around the growth that we have been talking about. The average listing for the weekend ending August was up pretty high, $245,000. Hoaglun: Stacy can we go back really quick? That was west Meridian, south Meridian - is that -north Meridian -you have north Meridian again? Which -? Kilchenmann: One is the golf course and I thought that was west-ish Meridian. Hoaglun: Okay and then central Meridian? Kilchenmann: Yeah. So our budget. We have one personnel enhancement request, which 1.5 FTE's for $140,000, the operating enhancement request for $14,000 and again I mentioned those big one time operating enhancement requests for $906,000, which most of that is that repayment to Rural Fire and I just wanted to remind you that we do administrative transfer to the enterprise fund of $1.7 million. The community services, they asked for north Meridian public outreach for $33,000. Then I will go through each division in a little more detail in the enhancements, so the general admin budget request is -the total enhancements and replacements is $687,000. Again I am just picking - I am not going through all of the little tiny ones -but there is a public information officer, emergency backup power for $170,000 and then we are doing some streetlight enhancements and partnerships all for improvements for the split corridor of Meridian City Council PreCouncil Meeting August 21, 2012 Page 6 of 10 $132,000 and then this year we had to do some big replacements of servers and so of course that was about $237,000. So Parks, they got their treat early -they got their maintenance shop in as 2012. So it shows up here in their carry forward. As you remember we went through some gyrations in the capital improvement to fund that, so we moved something up and we also removed something so that we could pay for the maintenance shop. Other than that their main expenditure - or the main item in their budget come from impact fees and that is for about $400,000 for a Settler Village phase two and the Borup property and we always do $100,000 for pathways and they are also doing some split corridor median landscaping for $165,000 and then about $87,000 for improvements in Kleiner Park. So the public safety enhancement requests, they requested an additional $2.8 million with their total budget with fire and police together being $23.2 million. They have asked for replacement capital -police mostly vehicles, $240,000 with fire $90,000. The reimbursement to Rural Fire. We set aside $2 million out of fund balances for our capital improvement plan toward a public safety training center and police had $80,000 for two new additional fleet cars. So they did not have any personnel requests, just maybe some small little equipment requests. That is the end. De Weerd: Council do you have any questions? This is a public hearing, is there anyone who would like to provide testimony or ask any questions? Okay. Rountree: I move we that close the public hearing on item 3. Bird: Second. De Weerd: Okay, we have a motion and a second to close the public hearing. All those in favor say aye. ALL AYES. MOTION CARRIED. Rountree: Madame Mayor I would like the record to reflect that there were no questions asked and there were only two members of the Meridian public in our audience this evening. Both are regular folks that we know and appreciate very much and our early arrival for our regularly scheduled meeting back there reading a book. Bird: Madame Mayor, I would move that we approve the Fiscal Year 2013 proposed budget of $81,186,803 and send it forward to the county. Rountree: Second. De Weerd: I have a motion and a second to approve item 3 in form of setting our budget for next year and brining back an ordinance for next week for that official action. I will still ask for a roll call vote, please. Roll Call Vote: Bird, aye; Hoaglun, aye; Rountree, aye; Zaremba, aye. Meridian City Council PreCouncil Meeting August 21, 2012 Page 7 of 10 ALL AYES. MOTION CARRIED. Item 4: Public Hearing: FY2012 Amended Budget of $65,815,692 De Weerd: Okay, I will open the public hearing for item 4 and turn it over to Todd in Finance. Lavoie: I will quickly get through this for you. Again what I am going to go over are the amendments that you have already have been presented throughout the fiscal year. So a lot of this information should be familiar to you. The first page here, the original budget that we presented was a little over $67 million. We finished the fiscal year at $65.8 million as a city whole. So you can see the reduction of 1.97 percent for the fiscal year. Those changes were presented to you during the year in the form of amendments. I am just quickly going to go over some of the major funds and then we should be able to close this up pretty quickly. The general fund - in itself again we presented it to you at the beginning of the budget year at $33.6 million and we ended the year at $35.5 which is an increase of 5.81 percent. We will go over some of the amendments a little bit later. Again those were all impacted and approved during the fiscal year. The capital improvement fund, again, we presented $1.67 million to you at the beginning of the year, we reduced that budget by 9.41 percent and we ended the year at $1.5 million. The enterprise fund, we presented $31.8 million throughout the year and reduced the budget by 9.79 percent and we finished the year at $28.717 million. Again, additions and subtractions were amendments that were presented to you. The city did present 38 amendments to you throughout the year. The general fund presented 31 one of those, which increased the budget again $1.21 million. This is a quick list of some of the big ticket items that should be familiar with you guys and what was presented to you. The first item was the parks maintenance facility, a little over a million dollars and then the enterprise fund we presented seven amendments with the net reduction of a little over $3.1 million and the largest item there was a carry forward adjustment, which Stacy presented to you earlier on how we process it and you can see we reduced the carry forward by almost $3 million from beginning to end. This is a quick list of the general fund budget amendments -this report is actually presented to you every month in your city council reports. Just a quick one -but this is just a list of all of the items -bottom right hand corner -again, $1.2 million increase with all of the individual line items in there, you will see the maintenance facility a little over $1 million. So this is just a summary sheet of all of the items that were presented to you throughout the year. Then the enterprise fund - we reduced it over $3 million. The big ticket item there is the carry forward just under $3 million. With that I stand for any questions. De Weerd: Thank you, good job Todd. Any questions for Todd? Zaremba: I do have one that is kind of a procedure question I guess. I appreciate this information. Very good information, very helpful. I understand the necessity at some point, everybody sit still we are not going to change anything for the next month and one half so we can get through September 30t" or whatever. However, last week we had an issue that came up about public safety around Settler's Park around the streets of Meridian and Ustick. We have agreed to ask the Park's Department to move ahead and Meridian City Council PreCouncil Meeting August 21, 2012 Page 8 of 10 ask ACHD to put up signs for no parking in areas there and the Park's Department move ahead with an agreement with the unified school district for a property that they have adjacent to the park and asking our Park's Department putting a parking lot on that, which is going to be $60,000 or $70,000 or something like that which needs to move fairly quickly. I guess my question is we are planning to lock this in stone now, how can the Park's Department move forward? What do we need to do? De Weerd: They have worked that out between Parks and Finance and doing all of the footwork, so come October 1St, Finance has worked with Parks to move forward on an amendment at that time. Kilchenmann: Councilman Zaremba, the reason we do that is because we have to do that by statute is because we have to notice this budget and it has to fall in a sequence of days. So we can't - it is a statute lock so to speak. But I think we have figured out that issue and there won't be any delay in construction. Zaremba: So if I am understanding it is an amendment to next year's budget? Kilchenmann: Yes. Zaremba: And that is fine with me, I just wanted to know - I don't want to hold it up, but there has to be a legal way to deal with it. De Weerd: Councilman Zaremba we couldn't have done it any faster, so it is not delaying anything. I appreciate the question. Anything further? Mr. Bird did you have something? Bird: I do not. De Weerd: Okay, thank you Todd. I do have -this is a public hearing. Is there anyone who would like to provide testimony on this item 4? Seeing none. Bird: I move we close the public hearing on item 4 the FY2012 amended budget. Rountree: I have a motion and a second to close the public hearing on item 4. All those in favor say aye. ALL AYES. MOTION CARRIED. Bird: I move we approve the amended budget for FY2012 in the amount of $65,815,692 and to bring forward an ordinance next week and also to send this onto the proper people at Ada County. Rountree: Second. De Weerd: A motion and a second regarding moving this forward and we will bring an Meridian City Council PreCouncil Meeting August 21, 2012 Page 9 of 10 ordinance back regarding this. Madame Clerk will you please call roll. Roll Call Vote: Bird, aye; Rountree, aye; Zaremba, aye; Hoaglun, aye. ALL AYES. MOTION CARRIED. Item 5. Amended onto the Agenda: Executive Session Per Idaho State Code 67-2345(1)(d): - to consider records that are exempt from disclosure as provided in chapter 3, title 9, Idaho Code De Weerd: Item 3 is Executive Session. Bird: Madam Mayor? De Weerd: Mr. Bird. Bird: I move we go into Executive Session as per Idaho State Code 67-2345(1)(d). Zaremba: Second. De Weerd: I have a motion and a second to enter into Executive Session. Madam Clerk, will you call roll. Roll Call Vote: Bird, aye; Rountree, aye; Zaremba, aye; Hoaglun, aye. De Weerd: All ayes. Motion carried. ALL AYES. MOTION CARRIED. De Weerd: We are adjourned into Executive Session. EXECUTIVE SESSION: (6:33 p.m. to 6:55 p.m.) De Weerd: Council. I would entertain a motion to come out of Executive Session. Bird: So moved. Rountree: Second. De Weerd: All those in favor say aye. All ayes. Motion carried. ALL AYES. MOTION CARRIED. De Weerd: Okay, we need reconsideration on item 3, which was the FY2013 proposed budget. Meridian City Council PreCouncil Meeting August 21, 2012 Page 10 of 10 Bird: We have got a savings already, thanks to Ralph. We would like to redo the bud et and set the fi ure, instead of $81,186,803, it should be $80,186,803. With that I 9 g move that we put that into the ordinance for next week. Zaremba: Second. De Weerd: Okay, I have a motion and a second correcting the FY2013 budget that was printed at $80,186,803. With that said Madame Clerk will you call roll? Roll Call Vote: Bird, aye; Zaremba, aye; Rountree, aye; Hoaglun, aye. ALL AYES. MOTION CARRIED. De Weerd: Thank you and we will make sure that that is the numberthat is brought back in ordinance form next week. I would entertain a motion to adjourn the special meeting. Rountree: So moved. Bird: Second. De Weerd: All those in favor say aye. ALL AYES. MOTION CARRIED. MEETING ADJOURNED AT 6:56 P.M. 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