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HomeMy WebLinkAbout03.06.2009• • COUNCIL WORK SESSION March 6, 2009 8:00 a.m. Council Chambers Members present: Mayor Hurley, Cole, Getty, Steve Schmitt, Welper, Reggie Schmitt. Members absent: Hart, Greenwood. Moved by Reggie Schmitt, seconded by Steve Schmitt that the Agenda, as proposed, be approved. Ayes: Five. Absent: Hart, Greenwood. Motion carried. The purpose of the work session was to discuss the FYE2010 budget. Mayor Hurley noted that at the end of yesterday's meeting, we were looking at a 5.15 percent increase in the levy for residential properties. Michelle Weidner and Nancy Eckert have been working for some time trying to gather additional information on the health insurance and that data came in late last night. It's a big number and it will help. Mayor Hurley stated that enough cuts were made to the General Fund and Road Use Tax Budgets to help the overall levy and be legal at 8.10. Mayor Hurley stated he will present a proposed levy that is 3.1 percent increase in residential property tax over last year. Mayor Hurley distributed a copy of the FYE2010 General Fund Budget adjustments as of March 6, 2009. Mayor Hurley recommended the following changes: Ambulance Increase Line Item 3414 (Ambulance Fee) in the amount of $75,000.00 Mayor Hurley noted he is increasing the fees based on year to date. City Clerk/Finance Reduce Line Item 1780 (Elections) in the amount of $22,000.00 Reduce Line Item 1710 (Contingency) in the amount of $50,000.00 Mayor Hurley noted he is reducing the election line item and if there is a city run-off election, we will use contingency funds. Mayor Hurley explained that the contingency line item is used for any number of things that come up that are surprises and not planned. Self -Funded Health Insurance Reduce Health Insurance in the amount in the amount of $479,315.00 Reduce Road Use Tax Employee benefits in the amount of $295,425.00 Mayor Hurley stated that the we received information late last night that one of our people in the health plan will reach the $2.5 million medical maximum for benefits. In addition, we are using $200,000.00 designated funds in the employee benefits budget. Mayor Hurley distributed a coy of the FYE2010 Road Use Tax Fund Budget adjustments as of March 6, 2009. Mayor Hurley noted that the employee benefits paid with the Trust & Agency levy was reduced by $295,425.00. Mayor Hurley noted that he reduced the overtime in the Police Department by $32,000.00, but added $7,000.00 of the overtime to come out of the discretionary hotel/motel funds. Mayor Hurley stated that the Police Chief will have to watch the overtime line item and his ability to support community events. Mayor Hurley suggested that the community events may have to pay for some of the overtime. Mayor Hurley stated if the council accepts his recommendation the council will have to accept his request for $35,000.00 discretionary hotel/motel tax when it is placed before them later in the year. Council Work Session March 6, 2009 Page 2 Mayor Hurley reviewed items in the General Fund. Mayor Hurley explained that the process started out with a high degree of trust with the department heads. They are by his side daily and during crisis, and he has a great deal of trust that the department heads submitted their budgets based on his instructions. Mayor Hurley noted that he reduced the Fairview Cemetery budget by $5,000.00. We have been supporting the cemetery at $42,500.00. Mayor Hurley explained that by state law if a cemetery goes under the city has to pay to keep them afloat. Mayor Hurley noted his challenge to the Fairview Cemetery folks is to increase their revenues. Mayor Hurley stated that he reduced the Fire Department's overtime budget, which could cause rolling closures. Mayor Hurley stated with the Police Department budget, he was trying to hold onto the people we have even though they have a number of retirements and increase in calls for service. We will have to make the decision throughout the year of what we are capable of doing. We will have to continually monitor the Police Department budget. The Police Department lost a grant, so that officer has been budgeted in the general fund. Mayor Hurley stated that yesterday we had a $18.73813 levy or 5.5 percent increase and today he is proposing $18.30931 levy rate. Our current levy rate is $18.36. At a levy of $18.30931, we will be collecting an additional $1,431,143.00 property taxes or 3.87 percent increase in taxes collected. On a residential property, a levy rate of $18.30931 will result in an additional $38.64 property tax or 3.1 percent increase. Commercial property would decrease 0.04 percent and industrial property would decrease 0.31 percent. Mayor Hurley noted that $40,000.00 is in the health and services budget for KBBG, Eastside Ministerial Alliance and the Mayor's Yes Program. Mayor Hurley stated that several years ago, $250,000.00 or more was budgeted for these programs. Councilperson Welper stated he thought the total amount requested for health and services was $31,000.00. Michelle Weidner, Chief Financial Officer, reported that with KBBG the total amount is $33,500.00. Councilperson Reggie Schmitt expressed concern with the cuts in the Police Department overtime as he has heard good comments about the police presence at events. Councilperson Reggie Schmitt stated that the $40,000.00 budgeted for health and services was for the worse case scenario, and he suggested $25,000.00 of that money be put in police overtime leaving $15,000.00 for the social services. Mayor Hurley stated that in looking at requested budget for Line Item 1114 (overtime) in the Police Department, he is expecting $28,000.00 from the council's discretionary hotel/motel tax funds to be used for community events. Mayor Hurley stated we need to keep overtime for law enforcement, but the overtime for community events needs to be shared by the organizations. Councilperson Getty asked why can't the organizations pay for their own security for these events. Mayor Hurley responded that they asked for the city's help because they are bringing folks to the community. Councilperson Getty noted that the city helps with electricity, road closing, etc. Mayor Hurley stated that although we think only $33,000.00 is needed for the social services, someone may request help later on. If we squeeze departments to the bones, we are losing any flexibility, and not leaving much room for good or bad surprises. Councilperson Steve Schmitt asked with the decrease in funding to health insurance what will be the percent of increase. Ms. Weidner responded the increase will be just over 3 percent. Ms. Weidner noted that we received information that makes us think that will be doable. Councilperson Steve Schmitt thanked Mayor Hurley, Ms. Weidner and staff for all their work, but he feels we still can do better. In looking at other surrounding communities, they are looking • • Council Work Session March 6, 2009 Page 3 • at 2 percent increase or even zero percent increase. Councilperson Steve Schmitt recommended cutting travel for council members as he feels it has value in showing our departrrients the council will take a hit the same as them. Councilperson Steve Schmitt stated we talked about privatizing facilities maintenance with the expected retirement of Lou Cutwright, and he feels we need to step back and look at how we are delivering all our services. It comes back to economic development. If we can't compete with other communities we won't build our economic base. Councilperson Steve Schmitt stated he feels we are at the point we need to look at sharing IT and collaboration between departments that deliver services. UNI has stopped all travel, and state employees are receiving 0 percent increase in salary. We are expecting that 2010 we be even a greater challenge for businesses than 2009. Councilperson Steve Schmitt stated he feels the council needs to do everything they can to get to zero. Mayor Hurley explained that to get to zero percent tax increase, we would need to find an additional $1.3 million in the departments' requests, and if we go down that path and go through each department again we will not find it. As far as the $1,500.00 travel request in the council's budget that is the council's decision. We will probably have some turnover in the council this year, and the training offered by the Iowa League Cities is very valuable. Mayor Hurley stated he does not feel we can get $1.3 million out of the operating budgets without shutting down fire stations, getting rid of grant supported officers, reducing library hours, shutting down the Center For The Arts, etc. Privatizing building maintenance is down the road. We will hire Lou Cutwright to run facilities maintenance, but it will take a couple of years. Mayor Hurley stated he would love to reflect the numbers of surrounding communities, but we have some similarities and some dissimilarities, such as the miles of streets. Mayor Hurley commented do we retreat or charge, and he says we charge. We keep fighting the battle because there is a great day coming. Mayor Hurley stated we put a budget together that we believe is going in the right direction for a community that attracts. Mayor Hurley noted that 80 percent of the budget is personnel, and the only way to decrease the budget is to cut personnel. We have to have trucks and equipment to provide snow removal, cut the grass, etc. All that is left to cut is the 80 percent personnel costs. Most of our personnel are covered by union contracts, and we are currently in negotiations. Mayor Hurley stated that most cities have exactly this choice each year. Do we cut services and present a quick gratification or do we stick it out for a longer more secure future. Mayor Hurley stated that he has learned that the surest way to reduce taxes is to grow the tax base, don't grow government and pretty soon the tax rate goes down. Mayor Hurley stated his philosophy has been to continue on the path to grow out of it. Mayor Hurley noted he is not presenting any wholesale cuts in services. Councilperson Welper stated he has served on the council for almost eight years and four years on the Finance Committee, and it seems that we spend a lot of money on information travel, travel that is not needed for certification. Councilperson Welper asked how much money would be saved if we freeze travel. Mayor Hurley stated he already has cut some travel and would find it difficult to cut more travel. Ms. Weidner stated that most of the travel is required for certification. Councilperson Welper stated that so many times it is not for certification, but just to gather information. Mayor Hurley stated it is an idea, and he has thought about not allowing travel unless it is required for operations and certification. Mayor Hurley stated he went over the travel line items, and he did not detect that staff loaded these line items. Mayor Hurley noted that he has turned back more travel requests this year than all years combined. Councilperson Getty suggested that between now and Monday we may have answers with our unions, and he hopes Mayor Hurley could come in with a budget at 3 to 3.5 percent increase. Mayor Hurley asked if council is at $33,000.00 range for the social service organizations. Councilperson Cole stated she is against funding social services programs. Councilperson Cole stated she does not think KBBG is a social program. It serves a great purpose as Mayor Hurley and staff often appear on KBBG, and it is wonderful about having candidates on its programs. Councilperson Cole stated she would support funding KBBG at the same level as last year, but eliminate the other two programs. Mayor Hurley stated he would like to keep the Mayor's Yes Program because of the current economic crisis. Ms. Weidner stated the Mayor's Yes Program Council Work Session March 6, 2009 Page 4 is to help employ youth in the summer, and there may be lower opportunities for youth this summer because of the recession. Mayor Hurley noted that the city supports My EntreNet and the Greater Cedar Valley Alliance. We fund My EntreNet because it helps lower to moderate income businesses to become self- sustaining. We support the Greater Cedar Valley Alliance with about $85,000.00 funding, and he is satisfied that with the Alliance we get more than just one person. We are trying to grow out by growing our tax base through economic development. Mayor Hurley noted that we loaded 2 percent salary increase across the board, but it will be more of an increase than that. Mayor Hurley asked what about the non -bargaining employees. For the past two years, we have budgeted money for our non -bargaining employees for salary gap closure. In January 2009, we gave another $96,000.00 increase in salary for non -bargaining employees. We could lower the tax askings by not giving non -bargaining employees a raise or give them a lower raise, but continuing to give non -bargaining raises helps them to keep up with the bargaining employees, and we still haven't completed the non -bargaining salary gap. Mayor Hurley asked if council would be willing to give non -bargaining employees less wage increase than bargaining employees. With no further business before the council, it was moved by Getty, seconded by Welper that the meeting be adjourned at 9:16 a.m. Ayes: Five. Absent: Hart, Greenwood. Motion carried. Nancy Eckert City Clerk • •