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HomeMy WebLinkAboutCommittee of the Whole Minutes 07.16.2002 MINUTES CITY COUNCIL COMMITTEE OF THE WHOLE JULY 16, 2002 6:30 P.M. COUNCIL CHAMBERS MEMBERS PRESENT: Lauren Van RoekeI Doug Poehls Ken Olson Mark Mace Gay Easton Daniel Dart Dan Meats John Oakes OTHERS PRESENT: Matt Erekson Larry McCann Mary Embleton Steve Klotz Gay Easton stated that Mary Embleton would answer questions after her budget presentation. Mary stated that the 2002-2003 Preliminary Budget was distributed at the July 2na meeting. This was one of the briefest preliminary budgets distributed by the city in quite some time. There are tough decisions to be made in the future, and Mary has tried to give enough summary information for the council to be able to make informed decisions. The budget situation is tough and the city has had to become very creative in ways to meet the demands of the public to provide the same level of service with less resources. Mary distributed copies of the updated Preliminary Budget Mill Levy history. The mill value has dropped for the past five years and continues to do so. The certified mill levy was received from the Department of Revenue on July 8t~. The page in the original Preliminary Budget booklet was an estimated mill and was different than the certified mill lew. Mary distributed the Revised Budget Summary Schedules. Due to year-end events, the sheets have been revised several times since July 2nd. The date of revision is included at the bottom of each revision sheet. Mary also distributed the clerk-treasurer's department budget. A chart was included to illustrate that the majority of the costs for the clerk-treasurer goes into personnel services. Personnel services include wages, taxes, and benefits. Operation and maintenance costs, including supplies, maintenance contracts, computer program contracts, postage, advertising, etc., were also illustrated on the chart. No capital outlay monies have been spent since FY 2000. Mary offered to answer the questions raised at the July 2~ council meeting regarding the preliminary budget. One question was regarding the amount that was applied for Parks. Mary explained that reorganizational changes made in the Public Works Department during the last week of June made it necessary to reallocate the wage spread for public works employees. The city administration reviewed it and reallocated the percentages as city workers spend time in the parks and in other locations. That varies fi.om year to year. Upon review of the initial wage allocation by the Budget/Finance Committee, it was determined that there were too many FTE's in Parks and it was not a true picture of the planned work. It was then reallocated to a truer picture after the Budget/Finance Committee had reviewed the initial costs and before the July 2ad document was prepared and presented to reflect the most recent changes. The change from approximately $145,000 to approximately $233,000 was due to the reallocation. It has since been reviewed and revised again, and the Parks budget is closer to what it was in the beginning. That had a ripple effect and hit each fund because the public works employees work in several different funds. City Council Counmttce oft. he Whole minutes of July 16, 2002 Mary explained the cash reserve column on the budget summmy sheets. Cash reserve is the ending checkbook balance at the year end and will help can3~ a fund through the first few months of operation in the new fiscal year. By law, the cash reserve can be at a maximum of 50% of the appropriation for that fund. In the General Fund, the cash reserve will be at almost 33% at this time next year if the budget is followed. Ma~ recently suggested to the Budget/Finance Committee that the purpose of the Comprehensive Insurance Fund is for property insurance costs, liability insurance costs, and workman's compensation insurance costs. At the present time, only the property and liability costs that normally would be carded in the General Fund are in this fund. Workman's comp costs are still in the General Fund, but there should be enough money to redirect the workman's comp costs into the Comprehensive Insurance Fund this year. The legislature allowed for the creation of special revenue funds in order to give relief to the general fund. Additional mills can be levied for the special revenue funds. The workman's comp budget is $39,000 in the General Fund, and Mary will probably recommend transferring the costs to the Comprehensive Insurance Fund. That will give $39,000 of relief to the General Fund. The goal is to get the revenues less appropriations to a zero balance in the General Fund. Mary stated that increasing the property insurance deductible from $1,000 to $2,000 would realize a considerable amount of savings. There are not a lot of claims in that area, and an increase in deductible would save premium dollars. The balance of those would not put undue stress on the fund and it should be able to maintain a self-funded position. Mary explained the organization of the budget sheets. The first sheets are tax-levied funds for support. The planning jurisdiction is beyond city limits and has a separate and different assessed value and market value, and therefore mill levy value. The special assessment schedule requires a yearly assessment of fair value to cover expenses for that year. The special revenue and grant funds are designated for a particular purpose and can only be used for that purpose. Gas tax is a limited revenue stream that is received from the State of Montana and can only be used for streets. The grant funds have to be tracked separately. The Police Training Fund is used for training and reserve costs. The Capital Project Funds are the savings account for the city. The appropriation in the Capital Project Funds is blank because decisions still need to be made as to how to spend the money. Those decisions will probably be made after the council work session on August 3rd. The fund functions as a savings account, and the money comes from the General Fund. Because of a philosophy of "use it or lose it", department heads used to spend the remainder of their budgets in May and June before the end of the fiscal year. The new trend is to save some of the budget money in order to transfer the money into the department's CIP program. Being able to do that would encourage savings and give an incentive for more careful spending. Cash reserves earn interest, as projected in the Transfers/Revenues column of the Capital Project Funds page in the budget. The Enterprise Funds sheet was not yet included in the preliminary budget. Larry and Steve will present those funds during the council meeting tonight. There is still work to be done on those funds, and updated sheets will be distributed soon. Trust and Agency Funds are funds that have a different purpose for the city. They are either held in trust or they work as a pass through type of account. Cemetery Perpetual Care remained in the General Fund for years. It was decided that it would be placed more appropriately in a trust and agency fund. However, the bulk of that cash was put into capital improvements to use that money to try to make needed improvements in the cemetery. The Memorial/Endowment for the swimming pool is the monies that can only be used for the pool, and they will remain in that fund until the city is in a position to do something City Council Committee of the Whole minutes of July 16, 2002 about the pool. The Expendable Grant for the soccer field was obtained through Ken Olson's efforts. The court must set aside certain dollars fi.om every fine for the Drivers License Reinstatement, Court Technology Surcharge, and Crime Victims Funds. These monies are then transferred to the state through the county treasurer. Gay commended Mary for the effort and work that has been put into the budget. John Oakes asked if the monies in a fund with over 50% cash reserve are transferred into the Capital Improvements Fund. The law had been changed just this last legislative session, where it would allow transfer of cash from other sources. The interpretations that Mary has received state that those monies can be transferred into the CIP. Mary will research to make certain that this can be done. Mary mentioned that she would answer questions and receive suggestions from the council at any time. Dan Dart stated that, for the financial help of this community, it is imperative that Mary should earmark and explain any issues that arise out of the legislative session. Mary mentioned that Ken Olson is a member of the Legislative Committee for the Montana League of Cities and Towns. Mary is a member of the Legislative Committee of the Montana Municipal Clerks, Treasurers, and Finance Officers Association. It is imperative that the cities voice their concerns to the legislature because of the restrictions placed on cities by the legislature. Ken Olson stated that the six-month moratorium on spending contributed significantly to the success of the budget. However, the city cannot continue to do that and additional revenues must be generated. Mary stated that it is good to be aware of spending, but if spending is continually limited, the status quo is only maintained. The city cannot go forward or be proactive to accomplish the projects that need to be completed. Mary thanked the Budget/Finance Committee for their work and dedication in the budget process. The meeting adjourned at 6:59 p.m. Respectfully submitted, Cindy Allen Council Secretary