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HomeMy WebLinkAbout11-13-2002spSPECIAL CITY COUNCIL MEETING 2003 BUDGET WORKSHOP November 13, 2002 Minutes I. INTRODUCTION The November 13, 2002 special meeting of the Auburn City Council for the purpose of conducting the 2003 Budget workshop was called to order at 4:03 PM in the Council Work Area located on the first floor of Auburn City Hall, 25 West Main Street, Auburn, WA. Mayor Peter B. Lewis and the following Councilmembers were present: Rich Wagner, Jeanne Barber, Fred Poe, Sue Singer, Stacey Brothers, and Gene Cerino. Councilmember Trish Borden arrived at 4:08 PM. Staff members present included: Finance Director Shelley Coleman, Assistant Finance Director Lee Hall, Human Resources Director Brenda Heineman, Acting Public Works DirectodCity Engineer Dennis Dowdy, Fire Chief Bob Johnson, Parks and Recreation Director Daryl Faber, Police Chief Jim Kelly, Planning and Community Development Director Paul Krauss, City Attorney Daniel B. Heid, and City Clerk Danielle Daskam. II. GENERAL OVERVIEW Finance Director Coleman presented the 2003 Budget using overhead slides and the 2003 Preliminary Budget document. She noted that the mission and vision statements are not included in the Preliminary Budget but will be included in the Final Budget document. Budget Process Finance Director Coleman reviewed the budget process contained on page 23 of the Preliminary Budget. The process starts with the development of Council goals, departments then develop next year's work plan, preliminary department budgets are submitted to the Mayor, revenue projections are prepared and the first public hearing is held in September. The Council Committees review the preliminary budgets, the preliminary budget is filed in October, the property tax levy is set and the second public hearing is held on the preliminary budget. A Council workshop is then held, the final public hearing is held in December, and the budget is adopted before year end. City Council Special Meeting November 13, 2002 Page g Budget Policy Ms. Coleman briefly reviewed the budget policy beginning on page 28 of the budget document. The budget policy is shaped by the needs of community; the past, present and projected future fiscal environment; the established financial management policies, and the Council goals. Budget Summary Assistant Finance Director Hall directed the Council through the budget summary. All fund revenues (without fund balances) are $80,147,200; all fund expenditures are $92,048,163. All fund revenues represent a 10% decrease from 2002. All fund expenditures represent a 5.7% decrease from 2002. The General Fund revenues are projected at $36,789,900; a 1.7% decrease from 2002. General Fund expenditures are $45,237,205; a 4% increase from 2002. Departments were allowed a 2.5% increase in discretionary expenditures. Salaries and benefits increased approximately 8.4%. Ms. Hall noted that intergovernmental and miscellaneous revenues are decreasing. She explained that the Mayor/Council budget increased due to the addition of a secretary position, the movement of Auburn Update costs from Planning to the Mayor's Office, and the addition of an advertising budget. The Planning, Public Works, Solid Waste, and Equipment Rental budgets are also affected by reorganization. The Finance Department budget increased due to the addition of information systems projects and costs transferred from other General Fund areas. Councilmember Wagner suggested utilizing actual dollar figures rather than percentages to show the changes. Ms. Hall explained that Special Revenue decreased due to the completion of major arterial street projects. Additionally, the Utility Funds decreased due to completion of Public Works Trust Fund projects. She concluded that the ending fund balance for 2003 for all funds will be approximately $48 million. Financial Plan Ms. Coleman reviewed the Financial Plan beginning on page 49 of the budget document. She highlighted the schedule contained on page 51 of the budget, which is a summary of the City's financial structure. There are 28 funds and eight fund types. The Financial Plan includes an analysis of revenue and expenditures. City Council Special Meeting November 13, 2002 The estimated property tax revenue for 2003 is comprised of a base of $11,857,974, $118,580 from the levy increase, $337,505 from new construction, $82,462 from annexations, and $110,926 in refunds for total estimated property tax revenue of $12,507.447. The levy rate is estimated at $2.95 on the assessed valuation of $4,187,069,600. Councilmember Borden asked staff to determine the percentage of the assessed valuation that is Boeing property. Ms. Coleman directed Council to the six year forecast beginning on page 71 of the budget document. She noted that the utility tax recently approved by Council is not included in the preliminary budget figures. The Financial Plan also includes debt capacity and obligations. The Financial Plan section also analyzes the current and potential legislative action and its cumulative effect. She presented a table of the effect on the 2003 Budget and a cumulative effect over the period 1996 to 2003. Approximately $500,000 is revenue is lost in 2003 from the sales tax exemption on research and development and manufacturing. Approximately $506,100 in property tax revenue is lost in 2003 due to Referendum 47. Approximately $784,800 is revenue is lost in 2003 due to 1-695, and approximately $111,100 is lost in 2003 due to 1-747. Approximately $11 million in revenue is lost over the 1996-2003 period. Baseline Budget Ms. Hall presented the baseline budget. She noted there are no new positions in the General Fund. Discretionary expenditures were limited to a 2.5% increase. Departments reflected on their accomplishments and established 2003 goals. The baseline budget also includes proprietary working capital budgets. Ms. Coleman reported that Human Resoumes settled six collective bargaining agreements this year. The impact on salaries and wages for 2003 are: 3% for police commanders, 3% for commissioned police, 2.5% for noncommissioned police, 4% for fire, 2.5% for outside teamsters, and 2.5% for court and custodian teamsters. Councilmember Wagner questioned the impact of employee salary step increase on the budget. Human Resoumes Director Heineman stated step increases range from 2.5 to 3.2%, but not all employees receive a step increase. City Council Special Meeting November 13, 2002 Pag~ 4. Councilmembers reviewed the Non-departmental General Fund expenditures (Department 98). Ms. Hall outlined the expenditures: $587,600 for retirement pay-offs; $200,000 for the executive department for contingencies; $523,600 for LEOFF 1 benefits; $236,000 for public safety building design; $25,000 for GASB 34 implementation; $251,000 for Valley Comm debt service; $30,000 for the gateway program; $200,000 for the neighborhood plan; $840,000 for Endangered Species Act compliance (this items will be reduced by half); $200,000 for the City Hall courtyard repair, and $858,905 for transfers out. Ms. Hall explained that the transfers out include: block grant match, library bond debt service, fire apparatus replacement, and downtown revitalization. The Council then reviewed the Capital Improvement Fund 328, 2003 expenditures. The fund includes $1,030,600 for fire pumper and ladder engines, $330,000 for two aid cars, $702,000 for the second of three installments for the parking garage, $410,000 for the City Hall and Parks remodel, $60,000 for a sidewalk cleaner, $50,000 for City-paid Transportation Impact fees, $24,000 towards the Small Business Assistance Center, $200,000 in interest earnings to street preservation, $350,000 in REET 2 funds for TIP street projects, and $300,000 in REET 2 funds for Veterans and West Beverly Parks improvements. Councilmember Wagner inquired whether any funds have been set aside for the 3rd Street Project settlement. Ms. Coleman explained that unused funds from 2002 would be rolled over for that purpose. Ms. Coleman reviewed the employee positions that have not been filled: two positions in engineering ($143,000), two positions in planning ($103,000), one position in parks and recreation ($84,000), one position in Fire ($60,000), and three police positions ($244,00). The three positions cut from police include one of the two assistant chiefs and two positions for the alternatives to incarceration program. The positions cut from planning are a building inspector and a permit coordinator. The positions not filled in engineering include a secretary and a project engineer. The position not filled in parks and recreation had been approved in 2002 but not filled. Mayor Lewis added that there is no plan to fill positions when they become vacant unless it is a position that would put the City at risk if not filled. Ms. Coleman reviewed the General Fund department cuts from the preliminary budget. Approximately $1.2 million needed to be cut from the preliminary budget. Each director was asked to reduce his/her budget on a pro-rata share basis to accomplish the overall budget reduction. The result was a $1.5 million reduction in General Fund expenditures. The City Council Special Meeting November 13, 2002 Page 5 budget cuts by department were outlined in the presentation. The reductions will be reflected in the Final Budget. Chief Kelly explained that the reduction in the police budget will be accomplished through reducing the outside incarceration costs and implementing an early release program. In response to a question from Councilmember Brothers, Ms. Coleman reported that the Downtown Revitalization Fund will have a balance of $1.8 million in 2003. Program Improvements Ms. Hall outlined the program improvements included in the 2003 Budget. Four new positions are included in the program improvements. The accounting specialist in Finance will be paid from the Solid Waste Fund. The Water Division Manager will be paid from the Water Fund. The Hydraulic Modeler will be paid from the Water, Sewer and Storm Funds. The Emergency Vehicle Mechanic will be paid from the Equipment Rental Fund. Capital Budget Ms. Coleman reviewed the Capital Development portion of the budget. She noted that the Water Fund does not have excess resources to service additional debt. Ms. Hall outlined the capital/construction projects for 2003 as contained on page 231 of the budget document. By funding source they are: $416,000 from the General Fund, $300,000 from the Capital Improvement Fund, $170,000 from the Golf Course Fund, $5,149,000 from the Arterial Street Fund, $1,411,000 from the Water Fund, $652,000 from the Sewer Fund, and $1,843,000 from the Storm Fund. III. DISCUSSION In response to a question from Councilmember Singer, Human Resources Director Heineman reported that a 2.5% cost of living adjustment has been included in the budget for non-affiliated employees. Mayor Lewis commented that from this point forward, every position that is not filled will have an effect on service. Mayor Lewis and Council discussed the potential effects of Initiative 790 which changes the administration of the LEOFF 2 retirement program. Mayor Lewis spoke regarding the increased population for Auburn and the investment and development that will follow. City Council Special Meeting November 13, 2002 Page 6 IV. ADJOURNMENT There being no further discussion, the meeting adjourned at 5:43 PM. DAY OF ~ , 2003. Peter B. Lewis, Mayor ' askam, City Clerk