HomeMy WebLinkAbout11-14-2001sp SPECIAL CITY COUNCIL MEETING
NOVEMBER 14, 2001
2002 BUDGET WORKSHOP
Minutes
I. Introduction
Mayor Charles A. Booth called the special meeting of the Auburn City Council to
order at 4:35 in the Council work area located in the Mayor's Office on the first
floor of Auburn City Hall. Mayor Booth and the following Councilmembers were
present: Rich Wagner, Jeanne Barber, Fred Poe, Sue Singer, and Stacey
Brothers. Councilmember Trish Borden arrived at 4:40 PM. Staff members
present included: Finance Director Shelley Coleman, Assistant Finance Director
Lee Hall, IS Administrator Lorrie Rempher, Human Resources Director Brenda
Heineman, Assistant City Attorney Judith Ausman, Planning and Community
Development Director Paul Krauss, Fire Chief Johnson, Assistant Fire Chief
Russ Vandver, Public Works Director Christine Engler, Storm Drainage Engineer
Tim Carlaw, Water Utility Engineer Tim Osborne, Utility Engineer Duane Huskey,
Sewer Utility Engineer Jeff Roscoe, Transportation Engineer Michael Fuess,
Parks and Recreation Director Dick Deal, Police Commander Will Lathrop, and
City Clerk Danielle Daskam.
Mayor Booth announced the purpose of the meeting is to review the 2002
Preliminary Budget and allow discussion of proposed programs and the impacts
of Initiatives 695 and 747 and the September 11, 2001 terrorist attack.
Finance Director Coleman presented the Council with a handout consisting of
the overhead slides used during the meeting and gave a brief overview of the
components of the budget presentation this evening.
II. General Environment Overview
Predictions for the economic environment include a slowdown in the economy,
fluctuating fuel and energy prices, a decrease in new construction, increases in
unemployment, reductions in sales tax revenue, additional voter initiatives to
reduce taxes, lack of consumer confidence, and increasing medical costs. Other
elements to consider are the effects of Dot Com commerce on sales tax
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Novgmber 14, 2001
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revenue, potential loss of B&O utility taxes, and the impact of reduced health
care and human services provided at the state and county level. However,
interest rates are low and will remain so for some time, the stock market is back
to pre-September 11, 2001 levels, and the Supermall appears to be doing well.
Finance Director Coleman noted that six of the seven labor contracts with the
City expire at the end of 2001. Contracts are currently being negotiated.
III. General Fund Balances
General Fund revenues are estimated at $37,441,020, while expenditures are
estimated at $43,406,600. The overall General Fund increase is 6.1%. General
Fund operating budgets were limited to a 3.5% increase in discretionary
expenditures. The overall General Fund increase includes allowances for salary
step increases, labor contract negotiations, and limited program improvements.
The 2001 beginning fund balance was $10.6 million. The anticipated 2001
ending fund balance is $8.8 million. Approximately $3 million is anticipated in
increased revenues; approximately fifty percent of which is from utility taxes due
to increased energy costs. Also expected is approximately $1.4 million in budget
expenditures that were not spent and have been allocated for next year.
Therefore, the beginning fund balance for 2002 is expected to be approximately
$13 million, comprised of $574,000 in designated retirement reserve, $4.3 million
in designated reserve and $8.3 in undesignated balance. The anticipated ending
fund balance for 2002 of $7.3 million is comprised of $524,000 for designated
retirement reserve, $4.3 million for designated reserve and $2.4 million in
undesignated reserve balance.
IV. Revenues
Finance Director Coleman referred Council to page 53 of the Preliminary Budget
which contains a schedule of total revenues. Revenues are received from the
following sources: charges for services $34.8 million; taxes $32.8 million,
intergovernmental, such as grants, $8.9 million; fines and forfeitures $590,000;
miscellaneous, grants, $3 million; other sources, interfund transfers $7 million;
and licenses and permits $941,000.
In the General Fund, revenues are received from the following sources: taxes,
$31 million; intergovernmental $1.6 million; charges for services $1.4 million;
licenses/permits $940,700; fines and forfeitures $590,300; miscellaneous
$734,100 and transfers in $788,080. General Fund revenue accounts to watch,
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November 14, 2001
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because of the economy's impact on the funds, include sales tax, electric utility
tax, permit revenue, plan check fees, interest, and the Motor Vehicle Excise Tax
backfill.
The 2002 property tax levy is comprised of $11.3 million from the base levy,
$340,000 from new construction, $113,500 from the one percent levy increase,
$36,000 from annexations and $25,000 from the refund levy. The estimated levy
rate will be $2.95 per $1,000 of assessed valuation. Ms. Coleman displayed a
graph comparing property tax collection based on IPD and Initiative 747 levels
for the years 2001 through 2007.
The City has eleven special revenue funds whose funding sources include
intergovernmental (grants) in the amount of $6,122,000; services, (includiing
impact fees) in the amount of $1,352,000; transfers in the amount of $1,285,175;
miscellaneous (including interest revenue) in the amount of $222,350; and taxes,
(including the Business Improvement Area taxes and the new lodging tax) in the
amount of $98,100.
The Capital Projects Funds, also known as the 328 Fund, includes, $1,400,000
from taxes, $850,000 from transfers in, $365,200 from interest and $22,000 from
charges for services.
The Utility Fund revenue sources include $28,617,828 from charges for services,
$2,620,000 from the Public Works Trust Fund Loan, $1,027,200 from other
sources, and $615,000 from interest earnings.
Other Enterprise Funds (Golf Course, Cemetery, and Airport) revenue sources
include $1,946,400 from charges for services; $1,125,000 from
intergovernmental sources; $543,200 from rental and lease fees; $34,800 from
interest; and $78,500 from transfers in.
The City has two internal service funds--Equipment Rental and Insurance.
Revenue sources for the internal service funds includes $1,430,400 from
interfund charges; $250,000 from interest; and $50,000 from transfers in.
In summary, the General Fund revenues increased by 3.26%, total revenues
decreased by 23.4% due to decrease in grant revenue; sales tax revenue
appears stagnant; energy costs are down; initiatives have limited revenue
growth; employment and income growth is feeble; and economic growth is not
anticipated until late 2002.
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V. Expenditures
Finance Director Coleman presented an overview of the General Fund
expenditures. Police and Fire comprise the majority of General Fund
expenditures. Other General Fund expenditure budget categories include Mayor
and Council, Human Resources, Finance, City Attorney, Planning, Public
Works, Street, Parks and Recreation and Non-Departmental. General Fund
program highlights include $443,500 for the Human Resources/Court drug
treatment rehab costs, $318,000 for human services programs, $1.3 million for
jail costs, $49,100 for police laser devices, $68,000 for Fire facility repairs,
$50,000 for Fire exhaust systems for the fire stations, $60,000 for new
defibrillators, $40,000 for City Hall building waterproofing, $35,000 for courtyard
repairs, $32,000 for sealing the east tower of the building, and $30,000 to
replace the Council Chambers curtain wall.
Assistant Finance Director Lee Hall presented the 2002 program improvements.
Program improvements included in the 2002 Preliminary Budget are: a Court
Probation Assistant for $46,400; a Network Analyst position for $58,820; an
upgrade to the Police Department's Spillman system for $195,715; a corrections
officer and supervisor for the jail for $143,101; an inmate transport van for
$33,840, a laser speed measuring device for the Police for $35,000; a
Scenesweeper argon laser for $14,040; a building maintenance vehicle for
$35,000; and Street bucket truck for $77,000; a Parks maintenance worker for
$50,200 and a computerized irrigation system for $181,000.
Information Systems Administrator Lorrie Rempher presented the proposed
technology improvements for 2002. Ms.-Rempher reviewed the police
technology enhancements which is referred to as the Spillman system upgrade
and involves a complete overhaul of the police department's information
technology and well as integrating other law enforcement and records
information systems. Other technology improvements include continuing the
upgrade of PC's, the Eden System upgrade/conversion for payroll and human
resources, upgrading the GIS tools, E-gov/technology planning; and the addition
of the museum to the phone and data network. The new Network Analyst
position will be responsible for developing the City's web site and intranet as well
as integrating on-line services.
Finance Director Coleman reviewed the General Fund Non-departmental
committed costs: Library debt of $306,200, Valley Com debt of $250,600,
LEOFF long-term care insurance of $121,225, retirement costs of $574,000,
LEOFF medical benefits of $300,000, Endangered Species Act costs of
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$475,000, Local Law Enforcement Block Grant match of $5,175 and payment to
Fire District 44 of $50,000.
General Fund Non-departmental discretionary costs include: $200,000 for the
executive department to cover any unanticipated personnel costs, $200,000 for
the Public Safety Building design, $20,000 for GASB implementation, $35,000
for the Lea Hill annexation study, $90,000 for the gateway program, $200,000 for
neighborhood planning, $108,000 for old senior center building improvements,
$183,000 for GIS mapping, $2 million reserve for the Water Fund, $150,000 for
arterial streets, $350,000 for fire equipment, $500,000 for downtown
improvements, and $10,000 for Maintenance and Operation Equipment.
Mayor Booth explained the reason behind the $2 million reserve for the Water
Fund. The funds are reserved to cover the cost of a water line paralleling A
Street to serve the Lakeland/Terrace View area, as the Water Utility fund may
not have sufficient revenue for construction of the line.
Councilmember Wagner inquired regarding the income earned from the Rail
Tavern property. He expressed support for identifying the revenue in a separate
fund. Finance Director Coleman explained the revenue is included in the 328
Fund. Councilmember Wagner explained that the Downtown expense fund was
approved based on the concept of a revolving fund. He suggested establishing
a separate fund to identify the income from downtown investment and
improvements.
Ms. Coleman reviewed the 2002 expenditures for the Special Revenue funds:
$639,000 for the Street Fund; $7.6 million for the Arterial Street Fund, $35,000
for the Lodging Tax Fund; $31,500 for the Drug Forfeiture Fund; $58,609 for the
Local Law Enforcement Block Grant Fund; $477,684 for the Community
Development Block Grant Fund; $84,300 for the Business Improvement Area,
and $630,000 for the Mitigation Fees Fund.
Councilmember Singer suggested including funding for land acquisition for the
third fire station in the 2002 Budget.
Finance Director Coleman reviewed the Capital Projects Funds. Capital Project
Fund - Municipal Park Construct 2002 expenditures include Brannan Park
Improvements in the amount of $80,000. The following capital projects are
funded from the 328 Fund: parking garage improvements in the amount of
$2,633,000, computer and technology improvements in the amount of $300,000,
Small Business Center commitment in the amount of $16,000, public art in the
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amount of $45,000, and a transfer to the Arterial Street Fund in the amount of
$500,000.
Ms. Coleman reviewed the Capital Project Fund 328 estimated ending fund
balances for 2002 as outlined on page 189 of the proposed budget. The 2002
estimated ending fund balances are: $1,907,300 for Council - Sales Tax;
$1,742,800 for Downtown Revitalization; $1,199,800 for fire equipment;
$148,400 for technology; $3,184,500 for REET 1; $1,412,000 for REET 2; and
$788,000 for unrestricted use. Ms. Coleman noted the Council-Sales Tax fund
balance was reduced by $2 million and transferred to the General Fund for the
transit center.
It was consensus of the Mayor and Council to allocate $750,000 from the 328
Fund Council - Sales Tax for the third fire station land acquisition.
Finance Director Coleman directed the Council to the Enterprise Funds
beginning and ending working capitals. The 2002 Water Fund ending working
capital is based on a 15 percent rate increase in 2002 that was adopted in 1999.
Assistant Finance Director Hall pointed out that the 2002 Sewer Fund working
capital has been adjusted to eliminate a one-time back-bill to Boeing. The net
effect is a reduction in ending working capital. Ms. Coleman noted that the
Sewer Fund contains a three percent operating revenue increase. A 17 percent
Metro increase for treatment costs will also be incorporated in the customer
rates. Councilmember Singer suggested staff provide Councilmembers with an
itemization of all utility increases that will be implemented next year. Public
Works Director Engler noted that a Storm Utility cost of service study will be
completed next year.
Ms. Coleman reviewed the Internal Service Funds changes in working capital.
The Equipment Rental Fund includes a program improvement for the purchase
of a service truck. Staff will review the equipment rental rates next year.
The City has three Fiduciary Funds--the Cemetery Endowment Care, Fire Relief
and Pension, and the Special Parks and Recreation Trust. Expenditures from
these funds in 2002 are: $78,000 from the Cemetery Endowment; $286,300 from
Fire Relief and Pension; and $11,500 from Special Parks and Recreation Trust.
VI. Summary and Discussion
Councilmember Brothers questioned whether King County's proposed budget
cuts in social services will impact the City's budget. Mayor Booth explained that
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cities are working through the Suburban Cities Association to pursue other
funding options for human services. Additionally, the City Council has a
contingency fund that could be allocated to fund human services.
Mayor Booth recessed the meeting at 6:15 PM for approximately five minutes.
Mayor Booth reconvened the meeting at 6:23 PM.
Council discussed the 328 Fund as outlined on page 189 of the budget
document. Mayor Booth expressed concern with spending down the 328 Fund
in light of the economic outlook. He also cautioned that there may be additional
City obligations if cost overruns occur on the 277th Street and the 34 Street
Projects.
There was discussion regarding the effect of Initiative 747 and Initiative 695 and
voted bond issues.
In response to a question from Councilmember Poe, Finance Director Coleman
reported that the 2002 Budget includes a one percent increase in property tax
revenues. The increases in the preceding three years were: 2.61%, 1.47% and
0.85%.
Councilmember Poe noted that the City's ending fund balance has increased
over the past six years. He agreed that the City can be cautious, but there is still
room for optimism related to the economy.
There being no further discussion, the meeting adjourned at 6:57 PM.
APPROVED THIS /~/~ DAY OF DECEMBER, 2001
Charles A. Booth, Mayor ielle Daskam, City Clerk