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08/20/2009 MinutesPage 11, City Council Budget Meeting, August 18, 19, & 20, 2009 City Council Budget Meeting -Cont. August 20, 2009 Pursuant to due call and notice thereof, a Regular Meeting of the City Council of the City of Grand Island, Nebraska was conducted in the Council Chambers of City Hall, 100 East First Street, on August 20, 2009. Notice of the meeting was given in The Grand Island Independent on August 12, 2009. Mayor Hornady called the meeting to order at 7:00 p.m. The following City Council members were present: Councilmember's Meyer, Niemann, Gilbert, Haase, Carney, Dugan, Ramsey, Zapata, Nickerson, and Gericke. The following City Officials were present: City Administrator Jeff Pederson, City Clerk RaNae Edwards, Finance Director Mary Lou Brown, City Attorney Dale Shotkoski, and Public Works Director Steve Riehle. INVOCATION was given by Mayor Hornady followed by the PLEDGE OF ALLEGIANCE. MAYOR COMMUNICATION: Mayor Hornady introduced Community Youth Council member Brandon Pfeifer. The City Council resumed review of the 2009/2010 proposed budget. Mary Lou Brown, Finance Director answered the following questions from last night's meeting as follows: What is the cost for the six new Fire FTE's to the General Fund? The six new Fire Department's FTE's are dependent upon a successful grant application. These six new employees (if successfully grant funded) will not be hired until the middle of September 2010. The cost of these employees in next year's budget will be approximately $15,000. During the 2010-2011 budget year, these employees will have a cost of about $350,000 depending upon union negotiated wages and benefits. The first four years of the grant funding will pay nearly 100% of their costs. The fifth year (2014-2015) will be the responsibility of the city's general fund. The cost during this 5th year would be approximately $400,000 using the 2009-2010 union pay scales. It is our belief that the increasing medical call volume (projected to reach 5,856 by 2015) will easily offset the full cost of these six new FTEs by the time the city is fully responsible for their salary and benefits. Why are there no transfers out from the Library Trust? Other than the fact that the interest earned by this money has dropped off by half, there is no reason that the transfers were stopped. The last transfer took place in 2005 in the amount of $6,240. Should Fleet Services have a negative Cash balance? Steve has updated his projections for Fleet Services for 2009 and those revisions actually result in a positive estimated cash balance for the current fiscal year. We have also determined that it is appropriate to do a one-time allocation to the departments utilizing the services of the Fleet Page 12, City Council Budget Meeting, August 18, 19, & 20, 2009 Department. This allocation is for the fuel tank replacement. The allocations will impact both the General Fund and Enterprise Fund Departments. What dollar impact will we see by lowering the non-union projected salary increase from 4.5%to3.5 or 3.75%? A 1 % reduction to the Non-union employees, inclusive of Department Directors, would amount to approximately $65,000 reduction to the General Fund. What is the total of all travel & training for the year? The total Travel and Training appropriation in the Proposed Budget for the General Fund is $201,724. Contractually, is there any way NOT to increase employee wages this year? The Unions would have to agree to a request to open up the Contracts to discuss a change to the wage settlements. The Union(s) would then have to agree to any reduction. Discussion was held concerning the City's debt/bond rating. Parks and Recreation -Steve Paustian, Parks and Recreation presented the Parks and Recreation Department budget. There are six divisions in the Parks and Recreation Department: Administration, Park Maintenance/Greenhouse, Recreation/Aquatics, Cemetery, Heartland Public Shooting Park, and Jack Rabbit Run Golf Course. Mr. Paustian reviewed each of the Parks divisions programs and problems. Comments were made concerning revenue sources and future needs in several areas. Councilmember Carney asked about plans for the tennis club. Mr. Paustian stated there had been a request by the tennis club to take over the racket club. Currently they were working on this request and the current contract in place. Councilmember Meyer asked about Lincoln Pool, how o$en they would be open, and could swimming lessons be changed to the Water Park. Paustian stated the pool was open about 50% of the time. The Heartland Public Shooting Park was discussed regarding the loss of revenue. Councilmember Haase asked about starting the new cemetery on Webb Road. Paustian stated is would be seven to eight years before we would need to start or it would be driven by the need. Pool drains were discussed and the unfunded mandate. Special events were discussed such as the GI Games. The golf course was discussed with regards to being an enterprise fund versus a general fund. Councilmember Dugan questioned the costs of season passes for the water park. Paustian stated they would be increasing the costs of the season passes for next year. Councilmember Ramsey brought up concerns concerning Lincoln Pool safety issues. Councilmember Carney asked about the beer sales at the golf course. Paustian stated the contract had changed with the new manager. Capital Improvement Presentations (CIP): Public Works -Steve Riehle, Public Works Director presented the following CIP projects for the Public Works Department: drainage projects totaling $1,819,500; street construction project - Page 13, City Council Budget Meeting, August 18, 19, & 20, 2009 Stolley Park Road Widening -Locust to Events Center $200,000; bonded street and sewer projects $463,540; miscellaneous Public Works projects $281,000 for a total of $2,764,040. Councilmember Meyer asked about the quiet zones and wayside horns. Riehle stated this probably wouldn't happen until the 2010 budget year. Storm water planning was discussed. Councilmember Gilbert asked questions about the Stolley Park widening project and Wasmer detention cell. Councilmember Ramsey spoke of concerns about the Stolley Park widening project. Comments were made to extend the project to Stuhr Road. Councilmember Meyer commented on traffic to the State Fair and not knowing how the traffic would flow. He recommended we wait to see where the improvements needed to be made. Northwest drainage project in the amount of $725,000 was discussed. Councilmember Niemann commented on Stolley Park widening and agreed with Councilmember Meyer in not doing anything until after the first year of the State Fair. Wasmer was discussed concerning culverts. Councilmember Haase asked about the gas tax. Riehle stated gas tax could be used for street maintenance, street equipment, and street construction. Revenues and expenses for this line item were discussed. Councilmember Meyer stated he supported the project from Stolley for Fonner but not any further. Parks & Recreation (CIP) -Steve Paustin, Parks & Recreation Director presented the following CIP projects for the Parks Department: miscellaneous park projects $150,000; hike/bike trails $200,000; and soccer/baseball field development -Vets Home $1,300,OOOfor a total of $1,650,000. Total Capital Projects were $4,564,040. Councilmember Meyer stated he was very pleased with the hike/bike trails. He suggested Council use the $200,000 from hike/bike and put it towards Police Officers. Councilmember Gericke commented that he would like to see more hike/bike trails on the north side of the city towards the new Vets Home softball complex. Councilmember Nickerson asked about grant funding for hike/bike trail and the needs for more Police officers. Councilmember Zapata questioned Lincoln Park Pool and the cost of a wet play area. Paustian stated a wet play area would cost $1.4 million. Enterprise Fund Presentations: Utilities -Gary Mader, Utilities Department Director presented the Utilities budget. The Utilizes department consisted of Water and Electric. The following budget appropriation was presented for the electric department: operating expenses, taxes, & fee 15%; labor 18%; baseload fuel (coal) 21 %; peaking fuel & power purchases 22%; capital -trans/dist 12%; capital -generation 3%; and debt service 9%. Mr. Mader stated fuel costs had doubled in the last few years. Pending regulatory issues consisted of carbon dioxide regulation, mercury regulation, and renewable portfolio standards. The following budget appropriation was presented for the water department: operating expenses, taxes, & fees 36%; labor 14%; capital -reservoirs, pump stations, & wells 7%; capital - distribution 29%; debt service 7%; and power for pumping water 7%. No rate changes were expected for this fiscal year. Page 14, City Council Budget Meeting, August 18, 19, & 20, 2009 Councilmember Haase commented on the cash flow for the electric utilities. Costs for PGS were mentioned. Water department revenues were mentioned regarding a decrease from $6.2 million in 2009 to $4.6 million in 2010. This drop was because of the Alda water main. Councilmember Gilbert asked about not having meters read in the homes. Mader stated they could investigate that option. Public Works -Wastewater -Steve Riehle, Public Works Director presented the Public Works CIP projects with regards to the Waste Water Treatment Plant. The following highlights were presented: personnel 10%; operations 25%; debt service 11 %; and capita151 %. Councilmember Meyer asked about other general supplies in the amount of $220,000. Councilmember Gilbert asked about the odor. Riehle stated there were three sources of odor - overloading by JBS, hydrogen sulfite, and rendering or process smells from JBS. Councilmember Dugan asked about the lottery matching fund in the amount of $285,000 and where it was in the budget. Jeff Pederson, City Administrator stated half that amount was in the budget but he couldn't tell exactly which line item it was in. Councilmember Meyer asked what term was used for the lottery match. Mayor Hornady stated it was a lottery match but didn't know what the actual title was. Dale Shotkoski, City Attorney stated the city would only be on the hook for two quarters and Lincoln would be responsible for the other two quarters. Councilmember Haase stated it should fall under the non-departmental fund. Mayor Hornady commented on the thorough work from the Department Director's in bringing forth a balanced budget. Specific changes council wanted needed to be brought forward in motion form so we could wrap up tonight. If not we could continue at next weeks council meeting. Councilmember Nickerson recommended we hear from each Councilmember before any motions were made. Increasing the mill levy by 3 from .25 to .28 and the $2 million bonding recommendation were discussed. Discussion was held concerning gathering the information before a vote was taken. Motion by Carney, second by Gericke that we make no changes to the budget tonight. Upon roll call vote, Councilmember's Meyer, Niemann, Carney, Zapata, Nickerson, and Gericke voted aye. Councilmember's Gilbert, Haase, Dugan, and Ramsey voted no. Motion adopted. Councilmember Meyer stated he did not want to raise the mill levy. He still wanted to cut travel & training and other expenses in the budget. Councilmember Nickerson asked the council to consider the following: reduce travel & training by 15%; wages -non-union reduce to 3.5 or 3.75; CIP projects move to next years budget -left turn lane by Northwest High School, Wasmer detention cell, and consider reallocating part of the insurance money to reinvest in hiring 4 Police Officers. Councilmember Haase commented on the City's fiscal policy and not having a solvent budget. The following were recommended: CRA tax moratorium and no raise in property tax. Page 15, City Council Budget Meeting, August 18, 19, & 20, 2009 Councilmember Niemann stated the following: a tax rate increase of 1.5 was agreeable but not 3, we needed 4 new Police Officers, travel & training deduction by 25%, wait on Stolley Park Road widening project. Councilmember Dugan stated the following: need 4 Police Officers, not sure it was necessary to increase tax rate by 3 but may have to raise it somewhat, vehicle replacement only if necessary, balancing budget - IT and fleet services have a loss and needs to be looked at, and Heartland Shooting Park, aquatics, recreation to establish a threshold on what the City would be willing to supplement. Councilmember Carney asked Haase for a definition of budget solvency. Councilmember Haase stated there was a time to spend and a time to save. Councilmember Gericke commented on travel and training that some departments asked for a lot and some asked for very little, an across the board cut may not be fair. What was cut this year may come back next year. He didn't want to raise taxes but may have to. Police Officers were needed even if we don't get the grant money. Grand Island is in the lower half of all first class cities in Nebraska relative to mill levy rate. Councilmember Ramsey stated Tuesday we need to know what the dollar amount was we needed to look at. A mill levy raise if it went towards the Police Officers and safety issues was acceptable. Councilmember Gilbert stated she would not vote for a raise in the mill levy. She asked if we could use funds from vacant fire fighters positions to be used for new Police Officers. Find a different way to fund the pumper truck. Overtime was mentioned to go back to the 2008 level. Health insurance rates, travel, and training needed to be cut; bookmobile may be a decrease if it is no longer in service, salary decreases. $850,000 is a minimum that needed to be cut. Councilmember Gericke commented on overtime and not having enough help. City Administration Jeff Pederson stated staff would put some figures together and bring the budget back for approval at the August 25, 2009 City Council meeting. ADJOURNMENT: The meeting was adjourned at 10:10 p.m. ~? n~ ~J RaNae Edwards City Clerk