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HomeMy WebLinkAbout11-09-2000sp SPECIAL CITY COUNCIL MEETING November 9, 2000 1:00 PM COUNCIL WORK AREA 2001 BUDGET WORKSHOP MINUTES I. Introduction The special meeting of the Auburn City Council to discuss 2001 Budget was called to order at 1:08 PM in the Council Work Area located in the Mayor's office. Mayor Charles A. Booth and the following Councilmembers were present: Jeanne Barber, Trish Borden, Pete Lewis, Sue Singer, Rich Wagner, Stacey Brothers, and Fred Poe. Staff members present included: Grant Accountant Lanny Petitjean, Training Officer Dan Bosch, Personnel Director Brenda Heineman, Budget and Finance Manager Sherri Crawford, Assistant Finance Director Shelley Coleman, Finance Director Diane L. Supler, Parks and Recreation Director Dick Deal, Assistant Fire Chief Russ Vandver, Public Works Director Christine Engler, Planning and Community Development Director Paul Krauss, Police Chief Jim Kelly, Assistant Police Chief Marion Dukes, City Attorney Michael J. Reynolds, and Deputy City Clerk Cathy Richardson. II. General Environment Overview Finance Director Diane L. Supler explained that the purpose of the special Council meeting this afternoon is to introduce supplementary data and information that will explain the philosophy and economic data used in the preparation of the budget. Director Supler noted that the City of Auburn Vision and Mission Statements were revised by Council to increase the focus on the regional significance of the community and its expanding presence in the King County/Puget Sound area, and being a responsive government to the Auburn citizens. Director Supler stated that considerations used in building the budget were an anticipated slowdown in the economy due to the rise in interest rates, federal and Special City Council Meeting Minutes - 2001 Budget Workshop November 9, 2000 Page 2 state economic projections, and fuel and energy price increases. New construction is expected to be strong into the future as well as continued low unemployment. Director Supler pointed out that the City has experienced a five-percent decrease in sales tax revenue over the last five months as compared to last year. III. Fund Balances Director Supler gave a brief overview of the 2001 budget revenues and expenditures and explained that some of the reserves will be used this year in order to accomplish projects as defined in the budget document. Director Supler stated that the overall budget increase is 2.66 percent with a zero percent increase in discretionary items. Many ongoing commitments, such as maintenance contracts and the Valley Comm contract, insurance premiums, and telephone and postage costs are outside the department's control but are essential needs to continue operation. This budget has no recommended program improvements due to the use of the City reserves. Director Supler explained that an anticipated increase in revenue of $1.5 million is expected in the general fund and some departments anticipate under spending up to $2 million on major projects for 2000. A decline in the fund balance will require a use of approximately $3 million in reserve to balance the budget for 2001. Director Supler reviewed the net loss of the water, sewer, airport and cemetery funds. IV. Employment Director Supler pointed out that salaries and benefits are the largest expenditures for the City. The salary increases for re-negotiated labor contracts range from' 2.5 to 3.5 percent and the salary increase for the remaining employees, with the exception of non-commissioned positions, is 90 percent of the Consumer Price Index (CPI) which is 3.9 percent. Budget increases for Council salaries.will not be in effect until 2002, but will be included as a narrative in the 2001 budget ordinance to insure that they are effective in a timely manner. Director Super explained that coordination between the finance and personnel departments indicated that there are eleven vacant City staff positions currently being advertised. Special City Council Meeting Minutes - 2001 Budget Workshop November 9, 2000 Page 3 In response to questions from Councilmember Wagner, Personnel Director Brenda Heineman clarified that the Domestic Violence Advocate position was previously a part-time position. Director Heineman anticipates acquiring grant funds to pay for this position. This position was formerly contracted through Domestic Abuse Women's Network (DAWN). DAWN is no longer able to offer the services required by.the City of Auburn. Director Supler stated that this years salaries are projected to rise 5.7 percent overall. Property taxes have traditionally been used to fund salary increases. Increases in property taxes have been limited to the Implicit Price Deflator (IPD). The shortfall will continue to increase because other sources of revenue will have to be used. Director Supler referred to a handout regarding the unemployment rates in Washington State. Professional positions have been difficult to fill due to the low unemployment rate in the state, specifically in King County. In response to questions from Councilmember Borden, Director Supler explained that the projected rise of 5.7 percent in salaries represents a cost of living raise, step-in-grade increases for eligible employees, and also any increases in benefit costs. Budget and Finance Manager Sherri Crawford gave a brief review of the non- departmental general fund expenditures and Department 98 general fund transfers. Department 98 funds are shown as a lump sum in the budget and are transferred from the general fund to various funds. V. 722 Impact Assistant Finance Director Shelley Coleman reviewed the impacts that Initiative 722 (1722) will have on the City. Ms. Coleman explained that under 1722, funds collected for IPD, and new construction and annexation increases from July, 2000 must be refunded. Under 1722 they are considered tax increases. The repayment method is still under consideration and may be in the form of a deduction from King County. Director Supler pointed out that property taxes are assessed by the King County Tax Assessor and collection is not under the control of the city, All other increases or fees are recommended by the City Council. Ms. Coleman stated that it is anticipated that the City of Seattle will file an injunction against 1722 and that many other cities will be joining in that lawsuit. It will take four to five weeks before a hearing is set. Special City Council Meeting Minutes - 2001 Budget Workshop November 9, 2000 Page 4 Director Supler stated that staff will check the impact of 1722 on other funds, such as utilities and whether rate increases should be reaffirmed. Some of the ordinances included rate increases that extend over a period of years. VI. Revenue Ms. Coleman stated that the revised levy basis is at the 1999 level 'and is significantly less than anticipated. Ms. Coleman referred to page seventy-five of the budget and distributed the six-year forecast and bar graph including 1722 impacts for comparison. For analysis purposes, the forecast was based on the assumption of current ongoing commitments. Sales taxes were increased by four percent per year based on new business, utility taxes were based on population growth, and services were increased by approximately four and one half percent. An estimated loss of $1.1 million in revenue is estimated for 2001 due to 1722. Director Supler stated that approximately seventy-one percent of the City's revenue is committed revenue with the remaining twenty-nine percent in discretionary revenue VII. Committed Expenditures Director Supler commented that items that have been identified as committed expenditures include the library, Valley Comm, LEOFF I medical reimbursement, retirement payouts, LEOFF pension benefits, and the Endangered Species Act (ESA). VIII. Discretionary Expenditures Director Supler' stated that future discretionary items include our commitment for arterial streets, replacement of existing fire equipment, city building improvements, and certain professional services. The Council recessed for a break at 2:32 PM and reconvened at 2:41 PM. IX. Capital Projecta1328 Fund Director Supler explained that staff has attempted to identify the Council's priority projects, additional capital commitments, commitments budgeted in 2001 from the 328 fund and resulting ending fund balances, debt considerations, and levy rate impacts. Ms. Crawford reviewed the capital projects summary and explained the anticipated expenditures for 2000 and 2001. Special City Council Meeting Minutes - 200'1 Budget Workshop November 9, 2000 Page 5 In response to questions from Councilmember Borden, Ms. Crawford stated that the REET 1 funds will be used for the senior center and the annual contribution to arterial street projects and REET 2 funds will be used for large street projects. In response to questions from Councilmember Wagner, Public Works Director Christine Engler stated the arterial street fund has been tentatively designated to a group of pavement preservation projects. The money was developed independently of the costs. There are several projects that have been identified to fit within the budget for arterial streets. Director Supler stated that staff is in the process of refining the operating impacts on some of the capital. Ms. Crawford displayed an example of annual debt service on Councilmanic and voter approved debt services. Discussion followed regarding the costs that are incurred by the jail and paid to King County. Director Supler stated that various avenues for grant funding and other external sources to assist in various projects are being researched by staff. X. Discussion The following long-term capital projects and general fund projects were designated as priority projects by Councilmembers: Parking Garage/Tenant and Retail Space Public Safety Building 277u~ Street Overpass/Interconnect 3'~ Street Overpass Community Center Fire Station Golf Course Airport Hangars JC Penney Building Assistant Fire Chief Russ Vandver explained that the Fire Department is exploring options for the location, or relocation, for a fire station that would best meet the needs of the city. Possibilities include a relocation of the temporary GSA Station to the vicinity of the 4100-4300 blocks of "A" Street SE and a relocation of Station 31 to the vicinity of 3000 block of Auburn Way N. Station 31 would be downsized to a response-sized station and the relocation is based on the predication of fire administration and fire prevention personnel relocating to the Public Safety building. Apparatus would also be installed in the Public Safety building to cover the central area. Director Supler pointed out the City is corresponding with Boeing regarding the acquisition of approximately 4.5 acres located on "C" Street. Special City Council Meeting Minutes - 2001 Budget Workshop November 9, 2000 Page 6 Discussion followed regarding the source of funds for various projects, the possibilities of voter funding, and grant and loan options. Director Supler recommended caution in using general fund reserves until the full impacts of 1722 and Referendum 47 are clear. XI. Summary Director Supler reviewed legislative issues that might have an impact on the City in the future. They included the results of the law enforcement studies regarding regional law enforcement services and regionalizing jails, probation liability, ergonomics study 'by the Department of Labor and Industries, jail costs funding, retirement benefits, and shoreline management and various planning issues. Director Supler pointed out that positive factors for the City of Auburn include its excellent geographic location, the strong international trade and the influx of world class companies in the Puget Sound region, and various amenities in and around the community. Future concerns include the stability of property tax revenue, decrease in employment at Boeing and the closure of Key Bank, the future of Costco's warehouse, voter approved education initiatives, and union contract negotiations. XII. Adjournment There being no further discussion, the meeting adjourned at 4:55 PM. Approved on the day of ,2000. Charles A. Booth, Mayor , Deputy CityC t Clerk f:\clerk~council~000ml 1-09special