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HomeMy WebLinkAboutApproved Minutes - 2010-04-26 LAKE OSWEGO Centennial1910-2010 CITY OF LAKE OSWEGO BUDGET COMMITTEE MINUTES April 26, 2010 Proposed FY 2010-11 Budget Chair Ron Smith called the meeting to order on April 26, 2010 at 6:35 p.m. in the Santiam Room of the West End Building, 4101 Kruse Way, Lake Oswego, Oregon. Members present: Jack Hoffman, Mayor Ron Smith, Chair Kristin Johnson, Council Pres. Katherine Shallenberger, Vice Chair Roger Hennagin Frank Bearden Donna Jordan Jeff Gudman Sally Moncrieff Kent Studebaker Mary Olson Daniel Williams Bill Tierney Members excused: Kelly Calabria Staff present: Alex McIntyre, City Manager Ursula Euler, Finance Director Jordan Wheeler, Management Analyst Brant Williams, Economic & Capital Development Director David Donaldson, Assistant City Manager David Powell, City Attorney Kim Gilmer, Parks & Recreation Director Denise Frisbee, Planning & Building Department Director Dan Duncan, Police Chief Don Forman, Police Captain Guy Graham, Public Works Director Erica Rooney, Assistant City Engineer Bill Baars, Library Director Ed Wilson, Fire Chief Larry Goff, Assistant Fire Chief Megan Phelan, Human Resources Director Chip Larouche, Chief Technology Officer Shawn Cross, Assistant Finance Director Kam Frederickson, Budget & Financial Analyst Christine Kirk, Public Affairs Manager Anthony Hooper, Management Analyst, Public Works Ann Adrian, Adult Community Center Bob Gilmore, Building Official Brad Stein, Emergency Program & Risk Manager Approval of April 19, 2010 Budget Committee Minutes The vote on the Minutes of April 19, 2010 was postponed until the changes sent to the staff by Committee members were incorporated into the draft. City of Lake Oswego Budget Committee Page 1 of 10 Minutes of April 26, 2010 Overview of General Fund Revenues Ursula Euler, Finance Director, and the Committee members examined each category of General Fund revenue (see page 175 of the budget binder). There were no questions about property tax revenue —which was discussed in the prior meeting. FRANCHISE FEES There were five major franchisees. Anticipated rates for 2011 were 3.5% - PGE; 5% -Allied Waste (aka Rossman Sanitary); 5% - Comcast; 4.3% - Verizon; 3% - Northwest Natural; and 5% - Electric Lightwave. The assumption underlying the PGE revenue estimate was that 3% growth and a 7% rate increase would increase the City's revenue. The Comcast estimate was conservative and reflected a little bit of growth over the current year estimate. Northwest Natural rate change depends on the customer group. That could mean approximately a 19% decrease in City revenue. She confirmed for Gudman that Northwest Natural's business in Lake Oswego came from mostly residential, non-commercial, customers. INTERGOVERNMENTAL The next category of revenues was Intergovernmental Revenues. It was a fairly large source of revenue for the City. Cigarette taxes had decreased over the past two years, but Liquor taxes were increasing. The City got 20% of that tax, plus state revenue sharing of liquor taxes. She reported the City had been awarded a Department of Energy Grant. It was based on reimbursement, so the budget estimated the City would receive $70,000 of it this budget year and $87,000 of it in 2010-11. Euler noted we were in the first year of receiving additional money from the new County Library Levy. The budget estimate of that revenue for next year is conservative. Euler explained that Police 911 services were reimbursed by the state. The City also received revenue for paramedic first response and emergency support to Tualatin Valley Fire & Rescue FINES & FORFEITURES Euler explained the significant rise in County/State Mandated Fees in 2009-10 was due to settlement of a very large lawsuit. It was a pass through of restitution. The money was to flow into the Municipal Court and then back out to pay claimants. FEES Euler explained that the first 4% of the 6% Hotel/Motel tax went into the General Fund and the other 2% went into the Tourism Fund. The revenue amount in the proposed budget was more conservative than in the last budget. There had been a lot of questions about Planning Fees because they seemed to be on an upward trend. Planning and Building activity was a little stronger than what the staff had assumed when the previous budget was created. Studebaker asked about the jump in Records Retention fees from $11,000 to $75,000? Denise Frisbee, Planning & Building Services Department Director, recalled that before the Building Department layoff, the staff had been doing that work to some degree. But the layoff created a backlog that had not yet been digitized and archived. Digitizing the records would make it easier for the staff and the public to access them. The records management clerk position would be supported by the fees. Gilmore clarified for Jordan that the fee was $20 per City of Lake Oswego Budget Committee Page 2 of 10 Minutes of April 26, 2010 electrical, or mechanical or plumbing permit. Studebaker asked if the extra $62,000 revenue from fees would pay for the clerk position. Frisbee said the City would wait to hire the clerk until it had collected enough fees to make it a self-supporting position going forward. The law allowed the City to collect records retention fees, but it could not charge more than the cost of records retention. Euler also advised that the money from the new School Construction Tax was a pass-through. SALES & SERVICES The police and fire agencies had forged alliances with neighboring areas, such as West Linn, Milwaukie, Riverdale, Alto Park and Lake Grove. Those revenue amounts were likely to be realized because they were based on those jurisdictions' levies. Kim Gilmore, Parks and Recreation Director, explained Luscher Farm produced two income streams from produce sold from the CSA community garden (Merchandize Sales) and garden plots (Organic Education Center). REIMBURSEMENTS Euler pointed out that in 2009-10 the City expected that it would get $134,000 in EPA energy savings rebate, but it had not materialized. The City did not budget rebate revenue in the General Fund for 2010-11. OTHER REVENUES Euler had been asked previously why Other Revenues - Sundry Income seemed high compared to previous years. She explained that in the proposed budget several funds that performed general government operations had been combined into the General Fund and they each had a separate Sundry Income Fund. This budget combined them into one line item. It was a total of many small items like late fees and a few larger payments such as $13,000 from the Chamber of Commerce for the Commercial Market Retail Study; and a $10,000 refund from Trojan. TRANSFERS INTO THE GENERAL FUND The staff had sent out a lengthy answer document the previous Friday. Tierney said he had found it very helpful. The consensus was to skip this section. Department Presentations City Council Wheeler observed the City Council had the smallest budget and not much had changed. There had been slight CPI adjustments to the stipend. He addressed questions he had received from Tierney and Olson. They had asked about the difference between the estimated and actual Development and Training budget. It held funds to be used to pay for Councilors to attend conferences, such as the National League of Cities. But it turned out that not all the Councilors attended. Hoffman clarified there would be more meetings to go to besides the National League of Cities meeting, which includes the Conference of Mayors and the Oregon League of Cities meeting. Gudman suggested budgeting conservatively for three or four or finding out how many planned to go and then allocating the dollars. He agreed that training could create a more effective councilor, but he questioned budgeting for all seven for any particular conference. Gudman observed if a few $4,000 items were cut the savings might add up to the $21,000 the City could put in the budget for the Skate Park. City of Lake Oswego Budget Committee Page 3 of 10 Minutes of April 26, 2010 Jordan and Johnson indicated they felt it was too early in the Committee's process to make decisions about which services to provide or continue to provide. Moncrieff suggested until then they each keep a list of the things they wanted to change. Smith addressed the process. He suggested the Committee keep track of questions like the ones just raised until they reached the deliberations stage. Then line them up and prioritize them according to what the community needed and desired. Johnson stressed that Councilors needed to be well trained to work in the New Normal. Training had helped her and she had learned a lot. Wheeler explained for Olson that the amount of the stipend for Councilors' incidental expenses was set by ordinance. CITY MANAGERS OFFICE Wheeler said the proposed 11.5 FTEs reflected the addition of a management analyst position. It had previously been a wastewater position that was redeployed as an analyst position. The City Manager had assigned the position to public works for a few years to help get some good systems in place for the organization, then will allow flexibility to reassigned the position where needed. That position is being covered by funds from the wastewater fund. There had been some other moves and reassignments and reclassifications that netted zero. The City Manager's budget Special Projects includes Centennial Celebration funding. Wheeler confirmed for Olson that the $150,000 in Celebration funding for 2009-10 had been spent. The proposed budget allocated $158,000 for Special Projects includes payment for the rest of the planner's contract and Celebration activities and spending of the Energy Efficiency and Conservation Block Grant from the DOE. Gudman wanted to know what the block grant was for. Wheeler said he would send him the list of projects. He recalled that one item on it was a PGE pilot project to do an energy audit of City facilities. Studebaker asked for a breakdown of Professional & Technical Services. Smith said his neighbors wanted to know how much the City was paying for a lobbyist and what it was getting for it. McIntyre and Wheeler reported it was a $54,000 contract with Capital Edge in Washington, D.C. The City needed a presence there to talk to legislators and their staffs about the things that were important to the City of Lake Oswego, including potential federal legislation that might affect the new water and sewer systems. For example, there was a proposal that would impose water system security requirements that would be very costly. They may look into any federal cost offsets for infrastructure to be gotten from the federal system. Smith asked how the administration would measure the success of the lobbyists' efforts. McIntyre said the measure was how much influence the City had, not how much money it got. Tierney observed that this is an investment and things do not turn quickly in D.C. though the efforts that have been made on the City's behalf should have the potential to bring quick returns, such as quick results from grants the lobbyists could help find. Smith agreed that was a good description of qualitative measurement. Moncrieff stressed that the lobbyists did not duplicate the Councilors' efforts. They helped them identify where the Councilors would be the most effective in lobbying when they went to Washington and which bills might cost the City more money. Bearden said he had dealt directly with lobbyists for a number of years and it was not so much what you get, but what you stop from happening to yourself. That was how to measure. Studebaker said his experience was that he had gotten very satisfactory results by taking an issue to the staff members at senators' local offices. So he was not sure the City needed a City of Lake Oswego Budget Committee Page 4 of 10 Minutes of April 26, 2010 lobbyist to make the kinds of contacts the others were talking about in Washington DC. Hennagin said one important factor to consider was the number of potential grants the lobbyists had informed the City about. He saw paying lobbyists as an investment. The City would watch to see if it brought results. Hoffman said he had been impressed by the lobbyists' ability to contact staffers. Even when the Councilors were not in Washington the lobbyists conveyed the City's message. He predicted it would take a number of cycles before the City would know what it got from the investment. The two infrastructure appropriation grants the City had asked for were grants the City could have never gotten on its own. Wheeler said printing and binding paid for Hello L.O. and other public affairs-related printing expenses. The Sustainability Match was the City's match for the AmeriCorps intern - Sustainability Action Month is a series of events in May. The Energy Efficiency and Conservation Block Grant is funding the match this year. Wheeler said the emissions management system was part of the PGE program that was part of the conservation block grant. It would continue the monitoring done in the pilot program if the program was successful. There is money in the City Manager's budget to do surveys and community involvement studies. The City Manager's budget also pays for the following various affiliations such as: Community Streetcar Coalition; Urban Land Institute; National League of Cities; Oregon League of Cities; and Oregon Ethics Commission. Euler pointed out for Shallenberger that the Personal Services budget factored in the estimated benefits, such as the cost of health insurance. She advised the benefits rate was close to 50% of salary. Shallenberger asked what all the communications positions were doing and how much communications cost. McIntyre said that information would be brought back to the Committee. Tierney wanted to know how the City counted positions that were vacant for part of a year. He reasoned that with 350 employees there was going to be some level of vacancy. McIntyre explained that if a large department was fully staffed during a particular year the budget did not try to account for specific persons coming and going from those positions. Gudman followed up on Tierney's question about vacant positions... asking why not factor in a vacancy rate that could be used for capital projects? Euler stated that if there were savings due to vacant positions that money would fall into the Ending Fund Balance and after that it would be available for one time spending. So it was a timing issue. That was a safer approach than budgeting for a vacancy rate. At 8:05 p.m. Smith announced a 10-minute break. DEPARTMENTAL PRESENTATIONS / QUESTIONS FIRE DEPARTMENT Chief Ed Wilson pointed out that much less money was transferred in and out of the proposed budget than in the previous budget. The department would save $100,000 in Overtime by eliminating the EMS coordinator position. That person was to be transferred back to work as a firefighter/paramedic. He confirmed the person currently filling the EMS position had the skills to be a firefighter because he used to be a firefighter. The Department had 45 members working a 53-hour schedule. In order to fill the almost 1,200 shifts per year the department used a combination of overtime and Kelly relief firefighters. He added that each Kelly relief person worked about 110 shifts per year. Using the Kelly relief team helped the Department avoid some City of Lake Oswego Budget Committee Page 5 of 10 Minutes of April 26, 2010 overtime. It kept the FTE counts pretty much the same over the years. But the staffing challenge for the Department was how to staff the prevention area. He said because 89% of his budget was Personal Services cost, any reduction in the budget would affect personnel. Wilson stated that 10% of the Department budget was for Materials & Services, and Transfers was only a small part of it. Wilson explained that he had requested $32,000 in capital funding to replace a 2001. He said the new Firefighter Wellness Program was to help prevent costly injuries. He saw the proposed elimination of the EMS coordinator position as having the biggest impact on the Department. The Department was pilot-testing a software program called Target Safety. The program would be used to help the Department do mandatory training at the station. He reported that an agreement arrived at during labor negotiations meant that fire companies could begin doing company inspections. There were about 2,300 inspectable occupancies in the City that needed regular inspections and the department was way behind. He thought that if the fire companies had training they could start inspecting about 1,500 of the less complex buildings every two years. But they would still be lagging on inspecting buildings that required a higher level of training. He explained the change in Development & Training from $39,000 to $51,000. This year it funded an additional $8,000 to recertify paramedics. They had to be recertified every two years. Funds had been transferred between accounts to pay for more in-house training. Wilson confirmed for Studebaker that the Department was authorized to assess fines during inspections. Compliance usually improved after they made a couple more visits, but there might be a little more revenue as a result of doing more inspections. If buildings had not been inspected for many years there was a greater likelihood the inspectors would find issues that needed to be corrected through fines. But the good news was companies would be safer in their buildings. Wilson said the department got$80,000 per year revenue from Clackamas County Consortium as long as they arrived on scene within 8 minutes 90% of the time. They arrived first and did the triage and packaging and then AMR carried the patient to the hospital. So patients were on the way to the hospital much quicker now than five years ago. POLICE DEPARTMENT Chief Dan Duncan pointed out the Department budget was reduced from last year. They had significantly reduced Materials & Services. They had transferred two technical support positions to the IT department that assist with LOCOM, keeping MDCs running in the patrol cars and such. They had cut a police officer position that had been vacated late last year. That position had been assigned to the Regional Organized Crime Narcotics Task Force in the past; and used to be the high school resource officer, but that had not worked. Further cuts in staffing would mean service reductions and would impact the overtime budget. They proposed to cut a community service officer and move the person currently filling it to an open records position. There would be no community service officer on weekends. They would discontinue the car seat recycling program; discontinue administering the seat belt class; and limit Police Department tours to Fridays. Duncan talked about revenue sources and explained impounds were down because of a court ruling that required a community caretaking function in order to tow a car. So officers left a car parked where it was if it was parked legally and safely. The department also received revenue from State Reimbursements; the Juvenile Diversion grant; ACTS of Oregon; seat belt classes City of Lake Oswego Budget Committee Page 6 of 10 Minutes of April 26, 2010 and contracts with West Linn and Milwaukie. The West Linn contract would have to be renegotiated next April. He said the Department proposed to buy two police vehicles and spend funds to light and make the parking lot more secure. Duncan said the Department also proposed to buy $75,000 worth of communications recording equipment. Gudman observed that the Records Department budget for Development & Training had increased quite a bit. Duncan explained his and other Portland area agencies were changing to a new records system. The Budget reflected the cost of a staff person's travel to other sites. He confirmed the Department did not charge for her services, but being involved in that group worked for the City because it was an opportunity to influence what they got. He clarified it was a one-year expense and not a recurring expense. Tierney asked why Transfers to Other Funds had declined substantially from the estimate for 2009-10 to the projection of$118,000 in 2010-11. Euler confirmed for Tierney that most transfers within the General Fund between departments were discontinued in 2010-11, but transfers to outside the General Fund remain. CITY ATTORNEY City Attorney David Powell explained that the single most significant change in this budget was that a $39,000 half time City prosecutor position would be converted to a contracted position. It was part of the $51,000 budgeted under Professional & Technical Services. He said the half time position would have gotten a salary increase anyway and the City came out ahead because it saved benefits. During the questioning period, Powell explained for Gudman that the office was making the change to an outside contractor prosecutor for the benefits savings and because an experienced prosecutor could do a better job with less supervision than someone just out of law school. Hennagin said he was impressed with the quality of legal services provided by the City Attorney's office. But he wanted to know if the City had more attorneys on staff than other cities of the same size. Powell recalled that Wilsonville had two full time civil attorneys; and Tualatin was smaller and had one in house counsel. Lake Oswego had traditionally valued having attorneys on staff because they provided a different level of service than just reactive service and they are involved at the beginning of many projects. In Lake Oswego applicants typically had a lot at stake including scope of development and had their own attorneys. So the City Attorney's office was very busy. Studebaker asked if a lot of legal work outside the City Attorney's office was contracted out. Powell recalled the LOIS project used outside legal specialists in permitting and environmental law. The DEQ agreement called for having in environmental expert and the magnitude of the project warranted the extra cost. INFORMATION TECHNOLOGY Chip Larouche, Chief Technology Officer, stated that work stations were to be replaced on a seven-year cycle; two communication technicians, managed by IT, had been transferred from the Police Department; and the Repairs & Maintenance increase reflected higher anticipated repair costs of computers with extended lives and other key network repair and replacement parts. He answered Tierney's question about why they were spending an extra $30,000 in repairs in order to save $50,000 in computer costs. It would pay for mostly network-related things like replacing UPS batteries, fuses and printers. City of Lake Oswego Budget Committee Page 7 of 10 Minutes of April 26, 2010 The other reason for the jump in his budget was that there were 117 computer systems in the current window for replacement. Instead of each department budgeting for that in its budget the expense was now shown in his budget. During the questioning Tierney asked for confirmation that 117 computer systems were to be purchased. Larouche explained that although some computers, such as those in the GIS department, needed to be replaced every four years, most were in a seven-year replacement cycle. He usually replaced an average computer in an average department with an average user at the six-year mark. Then he looked for ways to get an extra year or two of use out of it by putting it in the Library. The key was to know which ones were going into the replacement window. The upcoming window was a big one and included 25% of the computers. But next year the number would go down, as there would be fewer computers in that window. Larouche also clarified for Tierney that the IT department replaced its systems/security software every other year on a two-year contract. This was to be a year they purchased it. HUMAN RESOURCES Megan Phelan, HR Director, explained the Professional & Technical Services budget paid for attorney services, physician services connected to the drug and alcohol testing program, service fees for the HR information system through ADP, and also recruiting services. The department costs were high in the current fiscal year as it had engaged attorneys to help bargain all three labor contracts and to help in a large arbitration case with the largest association. The proposed Professional & Technical Services budget of$183,000 reflected a $41,000 increase in recruiting services. She pointed out the workload indicators showed they had processed over 2,000 applications in 2009 and about 2,000 in 2010. They had discontinued applicant-tracking service through ADP in order to change to applicant-tracking software that also facilitated online application processing. That would make them more efficient. It cost $10,000 to set up the new system and thereafter there would be an annual fee for using it. The annual cost of using the new software was about the same as the old service. The remaining increase was funds set aside for possible use for executive searches and relocation costs for senior level managers to replace managers who were eligible for retirement now. Citizen Comment Doug Roberts and Philip Stewart, Hill International, 111 SW Columbia St., Ste. 830, Portland, Oregon, explained their company was a consulting project management firm with experience in building municipal facilities. Roberts' specialty was law enforcement facilities. He and Stewart were currently working with the City of Independence, which was building a new city hall. Roberts had been monitoring the CIP and was concerned about the budget Lake Oswego was considering. He advised it needed review and validation and offered to help. Stewart advised that their experience was that a police department cost around $365 per square foot. Roberts advised the City could not just look at the cost per square foot, but it also had to consider what was going in the building. He recalled the City facility was to have a full data center, which was expensive space. Studebaker asked if they thought the budget was too conservative or showed the City would spend too much. Roberts advised the figures he had seen indicated the project was under budgeted and he was not sure the numbers in the CIP were realistic. Gudman asked, if it was under budgeted, what was the driving factor? Was the City off by half, or one-third, or how much? Roberts advised that it could cost about $170 per square foot to construct an office building, but a police station was more complex, so it cost more. There would be many things City of Lake Oswego Budget Committee Page 8 of 10 Minutes of April 26, 2010 the City would wind up paying for beyond the contractor's price, including soft costs and furniture. He asked if the City was going to charge itself the permit fees and SDCs that a normal developer would pay. If so the numbers were significantly understated. Gary Anderson, 380 A Avenue, President of the Lake Oswego Police Officers Association and a full-time police officer in Lake Oswego, said he was dismayed that the department was going to have a layoff. He said the Lake Oswego Police Department provided the highest level of service in the state compared to other agencies. Lake Oswego had 1.14 officers per 1,000 population. He compared that with Milwaukie; Tigard; Tualatin; West Linn, and Oregon City and Lake Oswego was the lowest. He said if the City cut positions it would be cutting service. He advised that as a suburb of Portland what happened there bled over into Lake Oswego. Local officers had done a good job of keeping that at bay. He said as times get worse and crime rises, Lake Oswego needed to have the manpower to be able to stand up to crime and provide the level of service it had always provided. Karl Koenig, PO Box 230104, Tigard, Oregon, President of the Professional Firefighters Association of Clackamas County, asked the Budget Committee to think about what services the Fire Department provided and the level of public safety the public expected and prioritize funding them. He explained that by eliminating the EMS position the City would be removing a full time employee who had a definite management function that required state-mandated training. That position ensured that all paramedics and EMTs in Lake Oswego were trained. He said the proposed budget would take a 100% funded job and cut it up between the rest of the management team. He questioned whether those people were likely to get the work done in an efficient manner. He said state requirements had doubled in recent years and they were going to go up another 50% in the next two-year cycle. John Surrett, 1685 Edgecliff Terr., indicated he did not feel there was enough transparency to get a handle on the City's use of consultants. He asked for a summary of all the consultant fees incurred in the current budget cycle and the proposed budget, broken down by department. He specified it should report all the legal fees (by project or by department). He said he had learned that the Tigard/Lake Oswego Water Partnership had four outside attorneys working on an inquiry by Oregon Water Watch regarding the project's application for more Clackamas River water rights. He wanted to know if the staff could handle some of those work projects on their own. Darryl Boom, 559 Evergreen Rd., indicated it was a mistake to reduce the two neighborhood planning positions to .5 FTE. He cited the Evergreen Neighborhood Plan as an example of a nice neighborhood plan. He observed the budget set aside $100,000 for a City birthday party; $100,000 for initiating periodic review; $60,000 to site tennis courts; $80,000 to study the feasibility of siting the Library downtown; $275,000 to update the Parks and Recreation Master Plan; $125,000 to update the Transportation System Plan; and $1.4 million for Foothills. He suggested enough money could be found in the budget to save the full time neighborhood planner positions. Chair Smith closed the public comment period and thanked people for their comments. Chair Smith anticipated the Budget Committee would need to hold a fourth meeting to finish the agenda and deliberations. Adjournment Chair Smith adjourned the meeting at 9:35 p.m. City of Lake Oswego Budget Committee Page 9 of 10 Minutes of April 26, 2010 Respectfully submitted, Kam Frederickson /s/ Kam Frederickson Budget & Financial Analyst APPROVED BY THE BUDGET COMMITTEE: May 10, 2010 City of Lake Oswego Budget Committee Page 10 of 10 Minutes of April 26, 2010