Work Session

Mayor and Council Work Session October 8, 2013 Agenda "Being the location of choice for a diverse and dynamic citizenry." "Providing a proud and prosperous community." "I don't know the key to success, but the key to failure is trying to please everybody." Bill Cosby 4:00 PM WORK SESSION 1. Property Maintenance Code Chapter 64 for Smoke Detectors 4:15 PM 2. Proposed Amendments to City Code Chapter 176, Peddlers and Transient Dealers 4:30 PM 3. City Center Holiday Parking Program 4:35 PM 4. Budget Discussion 5:35 PM 5. Vision and Mission Statement CITY ADMINISTRATOR'S COMMENTS MAYOR AND COUNCIL COMMENTS ADJOURN  REQUIRED MOTION MAYOR AND CITY COUNCIL HAGERSTOWN, MARYLAND Topic: Property Maintenance Code Chapter 64 for Smoke Detectors Mayor and City Council Action Requested: Review of draft update to Chapter 64, Property Maintenance Code, regarding smoke detectors, prior to introduction of the ordinance at a future regular meeting of the Mayor and City Council. Discussion: The State of Maryland has updated the Code requirements for smoke detectors. The proposed amendments to Chapter 64, Property Maintenance Code, update the City's regs to be consistent with the new State requirements. Financial Impact: Recommendation: Approval. Motion: Action Dates: October 8, 2013 - M&CC discussion October 22 - Introduction of Ordinance (if ready) November 26 - Adoption of Ordinance December 26 - effective date ATTACHMENTS: Name: Description: Smoke_Detector_M-C.pdf City Code Revision for Property Maintenance Code Regarding Smoke Dectectors  REQUIRED MOTION MAYOR AND CITY COUNCIL HAGERSTOWN, MARYLAND Topic: Proposed Amendments to City Code Chapter 176, Peddlers and Transient Dealers Mayor and City Council Action Requested: Discussion: Financial Impact: Recommendation: Motion: Action Dates: ATTACHMENTS: Name: Description: Peddler.pdf Proposed Amendments to City Code Chapter 176, Peddlers and Transient Dealers  REQUIRED MOTION MAYOR AND CITY COUNCIL HAGERSTOWN, MARYLAND Topic: City Center Holiday Parking Program Mayor and City Council Action Requested: To approve the modified rates from Monday November 25, 2013 to through Wednesday January 1, 2014. Discussion: For many years, the city has provided for limited free parking in the parking decks during the holiday shopping season. The city officially recognizes the beginning of the holiday season with the Hollyfest program. Typically held on the Monday before Thanksgiving, this year Hollyfest will be held on Thursday December 5th. Staff is proposing that 2 hours of free parking in the decks begin on the Monday after Thanksgiving. Thanksgiving and Black Friday are City of Hagerstown holidays. Parking will already be free on those days. The decks will remain free through the Thanksgiving weekend. Therefore, the 2 hours of free parking will begin on the following Monday. Financial Impact: The impact will be similar to other years. Since this is an annual program, it could be argued that the impact will be negligible as the reduction in revenues is expected within the parking budget. Recommendation: Staff recommends that the Mayor and Council approve the 2 hours of free parking in the University District Parking Deck and the Arts & Entertainment Parking Deck from Monday November 25, 2013 through Wednesday January 1, 2014. Regular rates will resume on Thursday January 2, 2014. Motion: See attached for the full motion. Action Dates: October 22, 2013: Formal approval by the Mayor and Council November 25, 2013: Free 2 hours of parking in both decks goes into effect January 2, 2014: Special rate ends at 6:00 am. ATTACHMENTS: Name: Description: Holiday_Parking_memo_2013.pdf City Center Holiday Parking Program Memo REQUIRED_MOTION_for_Holiday_Parking_2013.pdf City Center Holiday Parking Program Motion Sheet  REQUIRED MOTION MAYOR AND CITY COUNCIL HAGERSTOWN, MARYLAND DATE: October 22, 2013 TOPIC: Approval of City Center Holiday Parking Program Charter Amendment Code Amendment Ordinance Resolution  Other MOTION: I hereby move for Mayor and Council to approve the recommended city center holiday parking plan to allow two hours of free parking in the University District and Arts & Entertainment District parking decks on weekdays beginning Monday November 25, 2013 through Wednesday January 1, 2014. Parking in the decks after 4PM in the evenings and all day Saturday and Sunday will be free. Parking in the city center, central business district street and lot meters will continue to be free after 5PM and all day Saturday and Sunday as it is normally throughout the year. Parking enforcement of metered spaces along the streets and in city owned lots will be suspended during the city recognized holidays of Thanksgiving (Nov. 21st & 22nd) and Christmas (Dec. 24th & 25th). DATE OF PASSAGE: OCTOBER 22, 2013  REQUIRED MOTION MAYOR AND CITY COUNCIL HAGERSTOWN, MARYLAND Topic: Budget Discussion Mayor and City Council Action Requested: Discussion: Financial Impact: Recommendation: Motion: Action Dates: ATTACHMENTS: Name: Description: Utility_Dividend_Discussion_100813[1].pdf Utility Dividend Transfers to the General Fund Light_Fund_Dividend_Transfer_Policy[1].pdf Light Fund Dividend Transfer Policy Community_Betterment_Dividend_Policy[1].pdf Community Betterment Speical Revenue Fund Use Policy Parking_Revenues[1].pdf Parking System Revenues Budget_Session_Memo.pdf Budget Session Memo Utility_Personal_Property_Tax_Rate.pdf Utility Personal Property Tax Rate  City of Hagerstown Department of Utilities 425 East Baltimore Street 1 Clean Water Circle 51 West Memorial Blvd Hagerstown, MD 21740-6105 Hagerstown, MD 21740-6848 Hagerstown, MD 21740-6848 October 8, 2013 TO: Bruce Zimmerman, City Administrator FROM: Michael S. Spiker, Director of Utilities SUBJECT: Utility Dividend Transfers to the General Fund ACTION: Discussion / No action required Per the request of the Mayor and Council regarding “Utility Dividend Transfers to the General Fund”, I offer the following bulleted items for discussion and copies of the existing policies for review and comment. • The City of Hagerstown has Community Betterment Fund/Utility Fund Dividend Policy(s) in place for the Hagerstown Light Department (Electric Division) and the Water Division of the Utilities Department • No Community Betterment Fund/Utility Fund Dividend Policy exists for the Wastewater Division • In order to declare a dividend, a minimum working capital reserve level equal to two months of operating costs must be maintained at all times. Operating cost is defined as total operating expenses less depreciation and interest expense. Utilizing un-audited FY 13 year end financials, the position of each fund is noted below; o Electric Division Cash Equity $3,765,607.99 with projected 2 month operational revenue requirement of $4,693,317. o Wastewater Division Cash Equity $1,753,339.19 with projected 2 month operational revenue requirement of $2,085,475. o Water Division Cash Equity $4,260,284.73 with projected 2 month operational revenue requirement of $2,096,155. • Each of the three divisions is assessed an annual $4,500 Public Utility License Fee payable to the General fund FY13 Page 1  • Each of the three divisions is assessed an annual Payment In Lieu of Taxes (PILOT) FY13 o Electric Division $532,400.04 o Wastewater Division $1,298,199.96 o Water Division $660,00.00 • Each of the three divisions is assessed an annual Administrative Allocation (AA) FY13 o Electric Division $837,500.04 o Wastewater Division $510,00.00 o Water Division $650,00.00 • Each of the three divisions’ total FY13 PILOT and AA o Electric Division $1,369,900.08 o Wastewater Division $1,808,199.96 o Water Division $1,310,000.04 o Utilities Total-----$4,488,100.08 Utilizing the existing policy language would preclude a dividend declaration for two of the Utilities Department Funds in FY14. If the Mayor and Council choose to develop a policy for a dividend declaration for all enterprise funds, I would recommend the language contained within the attached “Light Fund Dividend Transfer Policy” be utilized. Staff will be available for discussion at the October 8 Work Session. Page 2 Phone 301.739.8577 ext. 143 Electric Fax 301.739.7958 TDD 301.797.6617 Phone 301.739.8577 ext. 650 W/WW Fax 301.733.2873 TDD 301.797.6617 Light Fund Dividend Transfer Policy: 1. As part of its year end annual financial evaluation process, the City will consider whether it is appropriate and prudent to transfer a portion of the unused retained earnings of the electric utility to the Community Betterment Special Revenue Fund. 2. This transfer payment can not be considered a normal cost of utility operations recoverable through the electric rate base. Rather, it is to be paid out of the annual net profits of the prior year just as a private investor owned utility would pay their shareholders a dividend from these sources. 3. The following controls will be developed to ensure that the payment of dividends by the Light Fund does not jeopardize the financial health of the utility. Profits from the utility's operation need to help pay for system debt retirement and capital improvements as well as provide a working capital reserve for unexpected items. • On an annual basis in November or December, after the prior fiscal year end audited financial statements are presented, an updated six year financial projection analysis of the Light Fund will be done. The analysis will include all expected sources and uses of funds for the current year as well as a five year future projection. • A minimum working capital reserve level equal to two months of operating costs must be maintained at all times. Operating cost is defined as total operating expenses less depreciation and interest expense. • Adequate funds must be provided for debt interest and principal repayments and any debt coverage requirements. • Capital expenditures on average during the six year projection period must be at a level at least equal to the average depreciation expense during the projection period. (This control is intended to prevent underfunding replacement capital expenditures to allow for dividend transfers). • Payment will be made after reviewing the prior year's audited financial statements, and preparation of an updated financial projection analysis for the Light Fund. • Mayor and Council act on staff recommendation and declare dividend if appropriate and in compliance with this policy. 4. These needs must be anticipated and adequately provided for in the Light Fund. Community Betterment Special Revenue Fund Use Policy: 1. The Community Betterment Fund is designed to be used for special one-time projects or contributions to be used for the betterment of the City of Hagerstown. The Fund will be used for non-recurring expenditures and should not be used for regular operating expenses. Use of the funds must be consistent with the City's financial policies, accounting standards, and the eligible uses outlined below. 2. Source of funds will be the Light Fund dividend transfer payments, host fees from First Urban Fiber, when those payments start and other sources of funds such as grants and contributions as the Mayor and Council may direct. 3. Uses of the fund will include non-recurring expenditures for city neighborhoods, downtown redevelopment, economic development projects, special one-time projects. Public art, park improvements or beautification are a few of the one-time special projects. Contributions to non- profit agencies for special one-time projects supportive of the City's goals may be 15% of the annual budgeted amount with no one agency receiving more than 25% of the amount set aside for non-profit agencies. Other uses of the fund may also include other similar one-time Community Betterment projects deemed appropriate by the Mayor and Council. 4. The City will budget use of the funds for eligible purposes in the year after they are received and available. City will not budget or commit to spend dollars until they are received. A portion of the expected available funds should be held in a contingency fund for use for special opportunities or other needs that may develop during the fiscal.  REQUIRED MOTION MAYOR AND CITY COUNCIL HAGERSTOWN, MARYLAND Topic: Vision and Mission Statement Mayor and City Council Action Requested: Discussion: Financial Impact: Recommendation: Motion: Action Dates: ATTACHMENTS: Name: Description: Vision_and_Mission_Statement.pdf Vision and Mission Statement