HomeMy WebLinkAbout11-05-2009 Special
CITY OF CITY COUNCIL
u ' SPECIAL MEETING MINUTES
d:~ ~ 'WASHINGTON NOVEMBER 5, 2009 5:30 PM
I. CALL TO ORDER
Mayor Peter B. Lewis called the special meeting of the City Council to
order at 5:30 p.m. in the Council Chambers of Auburn City Hall located at
25 West Main Street in Auburn for the purpose of discussing the 2009-
2010 Biennial Budget, property tax revenues and other revenue sources.
Mayor Lewis led those in attendance in the Pledge of Allegiance.
Councilmembers present were: Rich Wagner, Sue Singer, Gene Cerino,
Nancy Backus, and Lynn Norman. Councilmember Bill Peloza arrived at
5:32. Councilmember Haugen was excused.
Staff members present included: Information Services Director Lorrie
Rempher; Finance Director Shelley Coleman; Public Works Director
Dennis Dowdy; Police Commander Willard Lathrop; Assistant City
Attorney Steve Gross; Planning, Building and Community Director Cindy
Baker; Chief of Police Jim Kelly; Financial Planning Manager Karen
Jester; Parks, Arts and Recreation Director Daryl Faber; Human
Resources and Risk/Property Management Director Brenda Heineman;
and City Clerk Danielle Daskam.
II. 2010 BUDGET MID TERM ADJUSTMENT
Mayor Lewis noted that the City must set its property tax levy before the
end of the month in order to meet the deadlines established by the
counties. A property tax levy ordinance will be presented to the Council
for consideration on November 16, 2009.
Mayor Lewis reported that he has asked Department Directors to submit
adjusted 2010 budgets that reflect the budget for mandated operations
and budgets that reflect mandated operations as well as other core
services.
Mayor Lewis stated that business district at the north end of Auburn
represents up to sixty percent of the sales tax receipts for the City; and
should a flooding disaster occur in the area, the City's ability to operate
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Citv of Auburn Council Meetinq Minutes November S. 2009
would be drastically affected and only mandated operations would be able
to continue.
Using a PowerPoint presentation, Director Coleman reviewed beginning
fund balances from 2008 and 2009 and estimated beginning fund
balances for 2010 and 2011. Finance Director Coleman stated that 2007
was a very good year for revenues and the 2008 beginning fund balance
reflected a healthy beginning fund balance of $14,462,720. In 2009, the
beginning fund balance was $13,071,091. It is estimated that the
beginning fund balance in 2010 will be $9,463,001. Director Coleman
reminded that the Council has mandated an eight percent of expenditures
for reserve; the 2010 projected beginning fund balance does not meet the
eight percent reserve mandate.
BEGINNING FUND BALANCE
Year Fund Change
Balance
2008 Beginning FB $14,462,720
2009 Beginning FB 13,071,091 $
1,391,629
2010 Beginning FB 9,463,001 (3,608,090)
(Estimated)
2011 Beginning FB $ 2,707,046 $
(Estimated) (6,755,955)
Note:
➢ Need 8% of expenditures for reserve.
➢ 8% of $53,000,000 is $4,240,000.
➢ 8% of $48,000,000 is $3,840,000.
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Citv of Auburn Council Meetinq Minutes November 5, 2009
Finance Director Coleman reviewed the 2010 revenue estimates for the
2010 original budget and a proposed revised budget:
2010 2010
Original Proposed
Budget Revised Difference
Bud et
Property Tax $10,471,900 $ 9,967,000 $ (504,900)
Sales Tax 17,686,100 14,255,000 (3,431,100)
Other Taxes 13,701,700 12,793,600 (908,100)
Licenses & Permits 1,497,500 1,088,000 (409,500)
Intergovernmental 3,816,300 3,746,240 (70,060)
Charges for 2,091,000 2,061,000 (30,000)
Services
Fines & Forfeitures 2,729,700 1,870,700 (859,000)
Miscellaneous 486,200 396,200 (90,000)
Revenues
Other Revenues 42,000 42,000 0
Total Revenues $52,522,400 $46,219,740 $ (6,302,660)
Director Coleman reviewed the 2010 expenditure estimates for the 2010
original budget and a revised budget:
2010 2010
Original Revised
Budget Budget Difference
Council & Mayor $807,500 $ 759,200 $(48,300)
Court 17,686,100 14,255,000 (48,700)
Human 13,701,700 12,793,600 (237,350)
Resources
Finance 1,497,500 1,088,000 (89,155)
Legal 3,816,300 3,746,240 (247,285)
Planning 2,091,000 2,061,000 (1,263,400)
Police 2,729,700 1,870,700 (1,314,715)
Engineering 3,980,500 3,341,050 (639,450)
Parks 7,174,400 6,901,950 (272,450)
Streets 486,200 396,200 (48,200)
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Citv of Auburn Council Meetinq Minutes November 5, 2009
Non 3,980,000 3,980,000 0
De artmental
Total $57,184,700 $52,975,69 $ (4,209,005)
Ex enditures 5
Director Coleman reviewed a summary of the budget revisions
implemented by 2009 Budget Amendments 1 and 2:
• Froze 12.25 FTE's and departmental cuts
• Froze 24 FTE's from reduction in force
• Removed unaffiliated COLA and VEBA
The net effect of the revisions on the 2010 Budget is approximately $4.2
million.
Director Coleman reviewed revenues currently not levied by the City of
Auburn including a car tab fee. The cities of Des Moines, Edmonds, Lake
Forest Park, Olympia, Prosser and Shoreline have levied a car tab fee.
Director Coleman also presented a comparison of business license fees
for the area. The City of Auburn's current business license fee is a flat
rate of $50 per year. Director Coleman also reviewed business
occupation taxes. The city is limited to a maximum rate of 0.2 percent for
city taxes on business activities that are measured by gross receipts or
gross income. Cities in the area currently imposing business and
occupation taxes on gross receipts or gross income include: Algona,
Bellevue, Burien, Des Moines, Lake Forest Park, Olympia, Pacific and
Tacoma.
Director Coleman reviewed the property tax assessed value:
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Citv of Auburn Council Meetinq Minutes November 5, 2009
PROPERTY TAX ASSESSED VALUE (AV)
Total 2009 AV $8,719,721,892
Total 2010 Preliminary AV $7,819,240,659
Decrease from 2009 AV -10.33%
New Construction*
2009 Final $146,832,806
2010 Preliminary $88,243,699
Director Coleman noted that the 2010 preliminary assessed value is
estimated to decrease from 2009 by 10.33%.
Councilmembers discussed the effect of a flooding disaster on the City's
overall assessed valuation.
Director Coleman presented information on property tax banked capacity.
The City has approximately $7 million in banked capacity available;
however, the maximum allowable capacity the City can attain is $3.8
million.
Director Coleman reviewed the 2010 General Fund expenditures (revised
based on 2009 reductions):
2010 Revised
Bud et
Salaries & Benefits $31,584,195 59.6%
Supplies 1,224,500 2.3%
Other Services & Charges 9,222,800 17.4%
Intergovernmental 4,313,100 8.1 %
Capital Outlay 90,000 0.2%
Debt Service 250,900 0.5%
Fuel & ERR 1,766,700 3.3%
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City of Auburn Council Meetinq Minutes November 5, 2009
Facilities 1,674,300 3.2%
Information Services 2,849,200 5.4%
Total $52,975,695 100.0%
In response to a question from Councilmember Peloza, Director Coleman
stated that she believes that the amount of salaries and benefits (sixty
percent) from the General Fund is standard for cities across the state.
Councilmembers briefly discussed the various elements of General Fund
expenditures.
Director Coleman displayed a table illustrating the effect of the property
tax levy on $200,000 and $300,000 homes:
$200,000 Increase $300,000 Increase
Home Home
2009 Cit $298 $447
Lev Actual
010 Cit 335 $ 37 508 $ 61
Levy w/ 101 %
+ NCI
2010 Ci 364 29 546 38
Levy w/ NCI
+$1 M
010 Cit 390 26 585 38
Levy w/ NCI
+$2M
010 Ci 415 26 623 38
Levy w/ NCI
+$3M
010 Cit 436 21 654 31
Levy w/ NCI
+$3.8M
Councilmembers briefly reviewed the table and the effect of reduced
assessed valuation and adding banked capacity.
Director Coleman stated that the proposed property tax levy includes the
transfer of $1.2 million to the Save Our Streets Fund. Director Coleman
clarified that the amount of the transfer is over and above the amount
collected by the SOS levy.
Mayor Lewis pointed out that the General Fund revenue estimate for 2010
is $46.2 million while the 2010 revised budget expenditures currently
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Citv of Auburn Council Meetinq Minutes November 5, 2009
stand at $52.9 million, a difference of approximately $6 million. Mayor
Lewis stated that the downturn in the economy has resulted in the City's
revenue base being reset at the 2010 levels. Mayor Lewis anticipates that
the economy will recover at a rate of two percent per year at best.
Mayor Lewis reported that budget talks continue with all departments as
well as with the unions. Mayor Lewis stated that a revised 2010 Budget
will be prepared by the end of November.
Deputy Mayor Singer noted that in order to reduce expenditures by $5
million, the City will need to reduce services. Mayor Lewis responded that
the City intends to provide the best service possible with the workforce
that remains.
Councilmember Cerino suggested providing the Council with estimates of
the amount of revenue that could be generated from other sources.
Councilmember Peloza stated that if the City is successful in reducing its
expenses through negotiation with staff and the unions, the level of
service should remain the same; however, if the negotiations are not
favorable, then reduction in services must be considered in order to
balance the budget.
Councilmembers briefly discussed the components of property tax, i.e.
property tax levied by county, state, port, library, Valley Regional Fire
Authority, schools and other special districts.
Councilmember Wagner questioned the amount of reductions made by
the Auburn Municipal Court to date. Finance Director Coleman stated that
in 2008 three positions in the Court were frozen and removed from the
2009 and 2010 budgets.
Finance Director Coleman advised that if the unions agree to concede
their 2010 VEBA contributions and COLA's, the savings would be
approximately $850,000.
At 6:40 p.m., Mayor Lewis recessed the meeting to executive session for
approximately twenty minutes in order to discuss pending/potential
litigation pursuant to RCW 42.30.110(1)(i). Staff members attending the
executive session included Assistant City Attorney Steve Gross, Human
Resources and Risk/Property Management Director Heineman and
Finance Director Shelley Coleman.
At 7:00 p.m., Mayor Lewis reconvened the regular meeting.
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Citv of Auburn Council Meetinq Minutes November 5, 2009
III. ADJOURNMENT
There being no further business to come before the Council, the meeting
adjourned at 7:00 p.m.
APP VE HE Vel DAY OF DECEMBER 2009.
~t
Peter B. Lewis, Mayor D ielle Daskam, City Clerk
City Council agendas and minutes are available to the public at the City Clerk's
Office, on the City website, and via e-mail. Comp/ete agenda packets are
available for review at the City Clerk's Office and at the Library.
Internet: http://www.auburnwa.gov
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