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Home My WebLink AboutAgenda Packet - 2009-02-25 Special2009 City Council Jack Hoffman, Mayor Donna Jordan, Council President Roger Hennagin Kristin Johnson Mary Olson Sally Moncrieff Bill Tierney CITY COUNCIL SPECIAL MEETING AGENDA Wednesday, February 25, 2009 6:30 p.m. Council Chambers City Hall 380 A Avenue Also published on the internet at: ci.oswego.or.us Contact: Robyn Christie, City Recorder E -Mail: rchristie@ci.oswego.or.us Phone: 503-675-3984 The meeting location is accessible to persons with disabilities. To request accommodations, please contact Public Affairs at 503-635-0236, 48 hours before the meeting. 1. CALL TO ORDER 2. ROLL CALL 3. STUDY SESSION 3.1 Finance/Budget 101 (no written report) 3.2 Capital Improvement Plan (no written report) 4. ADJOURNMENT This meeting will be rebroadcast on channel 28: • Friday, February 27, 2009, 7:00 p.m. • Saturday, February 28, 2009, 12:00 p.m. • Saturday, February 28, 2009, 3:00 p.m. • Sunday, March 01, 2009, 7:00 a.m. • Sunday, March 01, 2009, 4:00 p.m. • Thursday, March 05, 2009, 7:00 a.m. • Saturday, March 07, 2009, 3:00 p.m. • Sunday, March 08, 2009, 4:00 p.m. • Monday, March 09, 2009, 11:00 p.m. Budget 101 Wednesday, February 25, 2009 Lake Oswego City Council Study Session Introductions Budget Committee City Council — Mayor Jack Hoffman — Councilor Donna Jordan — Councilor Roger Hennigan — Councilor Kristin Johnson — Councilor Mary Olson — Councilor Sally Moncrieff — Councilor Bill Tierney • Citizens' Budget Committee — Ron Smith, Chair — Katherine Shallenberger, Vice Chair — Daniel Williams — Gary Logsdon — Kelly Calabria — Jeff Gudman — Frank Bearden 1 DEFECTS IN ORIGINAL DOCUMENT Introductions City Department Directors Alex McIntyre, City Manager David Powell, City Attorney David Donaldson, Assistant City Manager Joel Komarek, LOIS Project Director Darin Rouhier, Finance Director Megan Phelan, Human Resources Bill Baars, Library Director Robyn Christie, City Recorder Dan Duncan, Police Chief Denise Frisbee, Planning & Building Director Bob Galante, Redevelopment Director Kim Gilmer, Parks & Recreation Director Guy Graham, Public Works Director Jane Heisler, Public Affairs Director Jerry Knippel, Special Projects Director Chip Larouche, Chief Technology Officer Elizabeth Papadopoulos, Maintenance Director Brant Williams, Economic and Capital Development Director Ed Wilson, Fire Chief City Budget Team Members Carol Bryck, Assistant Finance Director Kam Frederickson, Budget Analyst Jordan Wheeler, Management Analyst Budget Process Phases z Budaet 101 Puraose 1. Budget/Finance Concepts 2. City's Financial Structure 3. Budget Process & Citizens' Budget Committee role 1. CONCEPTS 02/25/2009 3 What is a budget? 1.1 CONCEPTS Budaet as a reflection of Polic • What the City deems most important will govern the way it spends available funds • Policy areas that guide the budget.- - udget: — Overall direction of the City —The breadth of its municipal responsibilities — The nature of the City's financial obligations — The City's risk and stability posture 02/25/2009 M 02/25/2009 Budaet as a Plan • The Budget is the City's Financial Plan • Defines how much will be spent on which City services • Funding level is a compromise between: — Amount of funding available (always restricted) — Amount of service desired (typically unrestricted) • Final budget reflects community priorities — As expressed through Citizen Budget Committee and City Council Budaet as a Control • Once set, the City Budget serves as an important Control — Restricts spending to the authorized limit — Helps ensure fulfillment of council priorities — Prevents unplanned spending of reserves • And a useful Management Tool — Budget monitoring can help identify problems/issues — May trigger a review of the original Budget (the Plan) • Significant changes need Council approval — Ensures that Council maintains control of the "Plan" What is a fund? 1.2 CONCEPTS What is a fund? • A fund is a self balancing set of accounts used to record estimated resources and requirements for specific activities and objectives. Common types of Funds: — General Fund — Special Revenue Fund — Capital Project Fund — Debt Service Fund — Reserve Fund — Enterprise Fund (Water, Wastewater, Surface Water, Golf, and Tennis Funds) 02/25/2009 0 Fund Structure • City Government Corporate Holding Co (City of Lake Oswego) (Weyerhaeuser) — Funds (22 total) (Water Fund) • Department (Water Treatment Plant) — Business Unit (20 total) (Wood Products) • Division (Hardwoods) — Product Brand or Line (Hardwood Plywood) What is Restricted vs. Unrestricted? 1.3 CONCEPTS 02/25/2009 7 Restricted • Monies available for specific purpose only — Over half of the City's revenue is restricted — Examples: Water Fees, Sewer Fees, and Grants — In most cases, Council has the ability to influence revenue (such as adjust water rates) Unrestricted • Monies available for any legal purpose — Less than half of the City's revenue is unrestricted — Property Taxes are the City's main unrestricted revenue source (other sources include Franchise Fees) — Council has full ability to determine how unrestricted funds are used (priorities) — Council has little to no ability to influence revenue stream 02/25/2009 N. Analoav — A Colleae Student's Budaet • Revenue • Expenses — Scholarships (restricted) E=:> — Tuition — Food Card (restricted) _ Food — Entertainment — Paycheck (unrestricted) — Transportation — Books — Rent Revenues All Revenues _ ❑ L 0 ❑ I Cal0 v a13 0 02/25/2009 9 2. CITY'S FINANCIAL STRUCTURE What is the City's Financial Structure? • Lake Oswego's financial structure is organized on the basis of funds which may receive restricted and unrestricted revenue • The City currently has 22 funds in 3 categories: Property Enterprise Other Tax Funds Funds Funds Mom:] For the 2007-2009 biennium, these funds totaled $192,765,744 02/25/2009 10 Lake Oswe o's Financial Structure x Genl Lake Osweao's Financial Structure [MMyN1I1001 11 Proposed Financial Structure 0 cl 0 0 ■ ■ ■ ■ 02/25/2009 12 Financial Structure Change • Why Change? — Create greater transparency — Does not impact designation authority — Greater flexibility — Simplification 3. BUDGET PROCESS 02/25/2009 13 Budaet Process Budaet Process 1St Phase • Developing the budget • City Manager provides guidelines and direction for Departments • Departments develop their proposed budgets • Finance and City Manager's Office review budgets • Incorporate City Council goals and priorities • Review Department request packages • Present Proposed Budget to Budget Committee on April 13, 2009 02/25/2009 14 Budget Process Budget Committee's Role and Responsibility Budget Process 2nd Phase • Approving the budget • Budget Committee reviews proposed budget • Public Hearing held on the proposed budget • Approval of the 2009-2010 Budget 02/25/2009 15 Budaet Process Budaet Process 3rd Phase • Adopting the budget • Public Hearing • Council Deliberations and Adoption • Adoption of the 2009-2010 Budget 02/25/2009 16 Budget Calendar • February 25, 2009 — Budget 101 • April 13, 2009 — Budget Committee Meeting #1 — City Manager presents 2009-10 Budget Message and Executive Budget Summary — Budget Committee discusses budget, possible changes, and possible approval of budget • April 20, 2009 — Budget Committee Meeting #2 — Budget deliberations, possible approval of budget • April 27, 2009 — May 11, 2009: Additional Budget Committee Meetings if necessary • June 4, 2009 — Publish Financial Summary and Notice of 2009-2010 Budget Hearing • June 16, 2009 — Council Hearing and adoption of budget Budqet Team Guidinq Principles • Transparency • Maintain quality services • Preserve borrowing ability • Operating expenses will balance with operating revenues except for planned draw downs or build up of reserves • Sustainable (avoid service disruptions) • Reflects Council goals and priorities • Consistency with financial policies • Facilitate and accomplish City's and Council's goals 02/25/2009 17 02/25/2009 Questions & Discussion Budget Status Update • Revenues are generally on -pace except for: • Golf revenue • Planning and Building Services • Expenditures are generally on -pace except for: • Street Maintenance revenue • A high level status report will be provided to the Budget Committee members. rn n o e N r r �o ID r ul II •-I K a 4' r u'1 r �D u� l0 � N O e Ul 1 r 0 Ctl O Y W f'1 N N N N N •-•I N O O m II 't F Y r IO IO l0 r r r r O t0 IO II {J a ❑ ew N r I II W r to r II W .] I I O t•'I IO N a N N N CT n1 r r r ID Io to G1 b N O a II O I` I N Ol ID r Io •-I m N r IO In II U 1 F w 1 W V Io to rn m .•I rn r<f m vl O <n t1 r•I m N a N N m Itl Io II rn II Al e 0 0 r II 1= � ui r vi .ti o r+ r of it II'1 Cn IO O I � I m to N O e -I O Itl fn N O1 N ID Itl m to N r M II IO II O II ••I r•I O N I� N r CII O V-1 1 N m N O m Ill M O II N m r e r a O( r tT to O � b a N W V r 11 m e s o r II m 0 ul a II m PI a ul 'a II � W IT O 1 w I � In e lD to N a In II � e N W N 11 m e m o N m II O I N N z w Vf I Ip II u N II I!) 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II r N M II M II ' II 11 II II II II II � 11 � II l0 II Io I N II N II O II O I m O II m W m II to II II rm II r r II In In n o o iI N o N �� o M �' ii ii rf � II � a+ II o o II u, o ul I o O1 rn II W II r n II ~ ~ 11 II r O r II O II Ill r M m N II N ul II ~ II II N N I N N II 'M-1 � I N N a II Io II II I II 11 II O II M 0 o II r r II o O li In o uY 11 M O M II o ii 0 o II n n II o o II M O M II e e m II Ol II O o tl rn a II Ic Io I r m In II e m N II a II In O Ifl II O II of N rn II N II u� IO ul II l0 I II .--1 r O M al 11 M II e .--I Ol m II O II � II II v e e II N Ill O m m W O II M II N Irl �I N N II n h O W O II n N W II N II M .o M II n I n II N n N II r n h li o o f ti Wf M O O O n h O O II M O M II m II Ol II 0 0 li rn m II m u i h m In I� e m N II a II IIl O Ifl I O II 01 N Ol II N II Itl IO In IO II .-I r O M Ol I M II e .-I m Ol II O 11 � II II e I e e II Irl In II O W m II � W O II m II In Irl I N N II r r II O W rn II r o� m II \D II M M II II II N N II r r II Ill II II II II II II � II 0 o II M M O O I In o u7 II r o II o I O O II N N O O b O l0 I Ill l0 � II ti II 0 0 11 II 0 o II o O I r W WI II In e o II M II In Ol Ill Ol I o r o I r II II II a � r � I II In r1 m e h II N 11 m II r II M M I ul In I II m m II M Io O II m N M In II M II � .a II � II II m � rn W � If II v W N N I n II vl II r II M M II I� II II II .•I N II II .-I .-I II II m II W II O O I O O II IO IO I l0 .-I O M M II m II O 0 O II o II O o O oII u9 ul lO IO N n h N II u't O to O M Io II M II II Ol II II O O II I III E Ill Il IA m 11 a e u n h O� O� In n Ol M n Obi OWI '. M OOi II Irl n II M u tD Io M .-I In .�-I m rn II II '1I G I I '-I II W U N > m W a W � M U �.7 W 1Wj U F F a E a 14vI F U m U q W W O m aI,77 z a s S W W m II m W F w U II Q H m Z CR % F I w Iit > W m Z - ? m .7 M W If In w II Q Z co O raO1 O ,0� F F rO� W II O E F tW» F v} .-I F O I-+ .-I O F K W O F F S II o q O U O U O q Ed O� O II m m m m U pNi U. Strategic Asset Management / Capital Improvement Program 101 City Council Study Session s•M a� 4 February 25, 2009 What is Asset Management? U.S. EPA Definition: Manacling infrastructure capital assets to minimize the total cost of owning and operating them, while delivering the service levels customer's desire. Guy's Favorite Definition : Maximizing the investment through - Doing the right thing With the right people At the right time For the right cost Strategic Asset Management Local Government Act, New Zealand — 1974 Local Government Amendment Act — 1996 Australia is currently moving toward similar requirements (as in N.Z) • Other countries implementing include the U.K., Canada, South Africa and the U.S. Leading SAM agencies include Orange County Sanitation District and Seattle Public Utilities 2/25/2009 �• 2— Overview • Strategic Asset Management (SAM) and applicability to the City • How SAM relates to our Capital Improvement Program (CIP) tr�et� Car Example Preventative Maintenance: ;Not paying attention to the items on • oo pr,anyee ' the left will most likelyaresult in the - T° • T,rroheonz . r" consequences balm resnemberthe ' . Brake aystem nepecopn ;old Fram Oil Filter advertisement?) --------------------------------- - coolam eyea�„,nepe�oo�vn�elang • Tnncm,ca�on,ncp.csarvtlwonusn,ng _Jvl Planned Replacement: Unplanned/Reactive: • T,res Brake eye— failure • Brake paus no rotas C-i,ng eyshm h,lure • Lamps Ebctncel cyslem h,lure • F,nws Clmah control system lallure • w,per wane: - wlnaenlewU�a„nepa, we,u,ge - Betbry - Malor angiro lalura - Malor transmissan hllure General types of Assets • Physical (water lines, reservoirs, pump stations, manholes, pavements, stone drains, bridges, trucks, buildings, etc) Knowledge (databases, 08M manuals, as -built drawings and maps, master plans, I.T. hardisoftware systems, etc.) • People 1 Public Facility Assets .f • Miles of wastewater lines = 200 • No, of wastewater pump stations = 11 • No. of wastewater manholes = 4,600 • Miles of water lines = 250 • No. of reservoirs = 16 • No. of water pump stations = 12 • No. of water meters = 12,000 Miles of streets = 160 " • No. of street lights = 3,400 ....r', • Miles of stormdrains = 155 • No. of storm manholes = 2,900 • 16 mgd water treatment plant Approximate replacement value = $ 700M+ Asset Life -Cycle 0 Design procure Operaw. ccmmissia iiiurtra n courtesy of Barry Buchanan, P.E., City of 9nl•m, OR Bottom Line Goal: Achieving Lowest "Life -Cycle" Cost to provide sustainable services (at required level of service, as established by customers, policy makers and regulators) • Financial • Environmental • Social How Assets Fail • Unable to perform at the required level of service • Unable to meet regulatory requirements or other obligations • Reached physical mortality or end of life • Unable to perform cost effectively Why is SAM Important? Promotes minimizing user costs (i.e. rates and taxes) for services • Helps ensure protection of public health, public safety and the natural environment • Preserves public infrastructure for current and future generations • Helps to achieve the "bottom line" 2 2/25/2009 THE STORY OF OUR - WATER INFRASTRUCTURE tm, produced by Penn State Public Broadcasting lmi?SU _ 2 Where do you start? Commit to investing resources to implement SAM • Consider long term and "life - cycles" • Start simple and develop a plan Stay the course, however, make revisions as necessary for continual improvement Five Core Questions 1. What is the current state of the assets? 2. What is my required level of service? 3. Which assets are critical to sustained performance? 4. What are the best operation and maintenance and CIP investment strategies? 5. What is the best long-term funding strategy? SAM Elements • Asset registry Condition assessment strategy Computerized maintenance management system • Enterprise asset management system Capital improvement program Service level definitions The Asset Management "Bible" • Developed by National Asset Management Steering (NAMS) Group, New Zealand • Divided into 5 sections: — Introduction — Implementing AM — Implementation techniques — AM information systems — Country specific info. Intended Outcomes • Better decision making • Better performance • Lower life -cycle cost • Limit risk exposure • Extended asset life and performance • Sustainable asset management 2/25/2009 Why spend time and money on SAM? • SAM is a means to achieving sustainable, lowest life -cycle costs for services SAM provides transparency and optimizes decision making • The stakes are high: ASCE estimates an investment of $1.6 trillion is needed over the next 5 years to bring the nations infrastructure to a good condition, to meet the needs of the current population • It's good business (and the right thing to do) 3 The "Bottom Line"-• Note - EPA predicts a 20-30% cost saving mav be realized CIP Overview • 5 -year plan for all public facility capital projects • Cooperative effort between all City departments • Brief description of projects, costs and funding sources and years to be completed CIP Document • Project worksheets by fund/service area • Project description • Revenue requirements • Project cost summary • Project related photograph or map • 5 -year summary sheets by fund/service area • Prioritization criteria • 'Roadmap" for CIP projects • Updated annually • Over 130 projects have been identified thus far 2/25/2009 CIP A Capital Improvement Program (CIP) is a short-range plan which identifies: • Capital projects and equipment purchases • Provides a planning schedule • Identifies options for financing the plan Milestone Dates • Start of CIP Process 01/15/09 • Draft CIP Document CIP Process Map Develo Draft CIP Finance Review p.e' (intlivltlaal Funded "and or.'Un funded'within 5- ea) year plan) Paternal Stakeholder Prepare "Einar' CIP Review e. Plannmg Document Commission, Budget Committee. ale.) 177� Review Draft CIP withlnternal Stakeholders Ci Manager Review ryand Approval Update CIP Ilse repeat process) Annually 03/27/09 • City Council Study Session 04/14/09 • Budget Committee Review 04120/09 • Planning Commission Review 05/11/09 Milestone Dates • Start of CIP Process 01/15/09 • Draft CIP Document 03/02/09 • City Manager Recommended CIP 03/11/09 - Final Draft CIP Document 03/27/09 • City Council Study Session 04/14/09 • Budget Committee Review 04120/09 • Planning Commission Review 05/11/09 • Public Hearing 06/02/09 • Adoption by City Council 06/16/09 4 SAM / CIP Interface • As we gain a better understanding of our assets, our CIP will help address the optimum time for when and how we replace, rehabilitate or renew the asset • Includes funding strategy to ensure capital funding availability equals capital funding needs • Raises awareness and transparency of the infrastructure investment and future needs Thank You! Guy R. Graham, P.E. Public Works Director/City Engineer 2/25/2009 5