City Council

JULY 13, 2015 The City Council of the City of Idaho Falls met in Special Council Meeting (Council Budget Session), Monday, July 13, 2015, at the City Council Chambers in the City Annex Building located at 680 Park Avenue in Idaho Falls, Idaho at 2:00 p.m. There were present: Mayor Rebecca L. Noah Casper Councilmember Ed Marohn Councilmember Tom Hally Councilmember David Smith Councilmember Barbara Ehardt Councilmember Sharon D. Parry Councilmember Michael Lehto Also present: Randy Fife, City Attorney Kami Morrison, Mayor’s Executive Assistant Craig Rockwood, Municipal Services Director Thane Sparks, Controller Kenny McOmber, Treasurer Melanie Marsh, Human Resources Director A.J. Argyle, American Insurance Representative Kathy Hampton, City Clerk Mayor Casper called the meeting to order at 2:00 p.m. She expressed her appreciation for the Councils participation regarding the budget process. She then requested Councilmember Marohn to lead the budget discussion. Councilmember Marohn expressed his appreciation to the Department Directors and Councilmember Lehto for their assistance. He stated the Department Directors have presented their budgets to Mayor Casper. The Councilmembers, as liaisons, will be responsible for presenting the departments budgets at the July 15, 2015 Budget Work Session. Councilmember Lehto presented the Idaho Falls Power budget at the July 9, 2015 Power Board Meeting. Councilmember Marohn requested Director Rockwood further explain the budget. Director Rockwood appeared and reviewed the timeline for the FY2015-16 budget process. The Directors have individually met with Mayor Casper who requested initial decreases, resulting in approximately $700,000 reduction. The tentative budget will be approved August 13, 2015 followed by a public hearing on September 3, 2015. Director Rockwood briefly explained handouts including: All City Expenditures, All Funds (Revenues versus Expenditures), General Fund Expenditures – Net Budget Comparisons. He indicated city expenditures exceed city revenues by $42 million, there is approximately $110 million in savings to cover the expenditures. Director Rockwood stated the proposed 2015-16 Budget expenditures exceed revenues by $2.7 million, including $1 million which is set aside for possible increase in the fire station costs. Director Rockwood reviewed the Property Tax Calculation handout. He stated the proposed revenue from a 3% levy increase and growth value was used to balance the proposed budget and explained the increase to each fund. The foregone amount would not change. He indicated the General Fund Revenues would see an increase with Taxes and Franchises, Licenses and Permits, Intergovernmental, 1  JULY 13, 2015 Parks Facilities and would see decreases with Miscellaneous Charges for Services, Fines and Forfeitures, and Miscellaneous (which includes donations and contributions). Director Rockwood reviewed Departmental Requests, explaining categorized items as: included in proposed budget; not included in proposed budget but could be considered; not included in proposed budget; items considered in the Parks Capital Improvement Fund. Requests for new employees by several departments were reviewed including brief discussion of Fire Department personnel. He also reviewed New and Replacement Capital Costing over $15,000 for Municipal Services, Police, Fire, Parks and Public Works Departments. Director Rockwood distributed information for city departments and divisions containing a 3-Year Comparison for: Net Budget, Wages and Benefits, Operation and Maintenance, Capital Outlay, and Interfund Transfers. This information also charted as Revenue to Expenditure Comparison. The 2015- 2016 Proposed Budget indicates the following: Legal: Wages and Benefits – 93% Operation and Maintenance – 7% Capital Outlay – 0% Municipal Services: Wages and Benefits – 54% Operation and Maintenance – 43% Capital Outlay – 3% Community Development: Wages and Benefits – 70% Operation and Maintenance – 18% Capital Outlay – 12% Human Resources: Wages and Benefits – 76% Operation and Maintenance – 23% Capital Outlay – 1% Police: Wages and Benefits – 85% Operation and Maintenance – 12% Capital Outlay – 3% Fire and Ambulance: Wages and Benefits – 65% Operation and Maintenance – 13% Capital Outlay – 22% Fire: Wages and Benefits – 64% Operation and Maintenance – 8% Capital Outlay – 28% Ambulance: Wages and Benefits – 67% Operation and Maintenance – 28% Capital Outlay – 5% Parks and Recreation: Wages and Benefits – 53% Operation and Maintenance – 31% Capital Outlay – 16% Parks (General Fund): Wages and Benefits – 51% 2  JULY 13, 2015 Operation and Maintenance – 27% Capital Outlay – 22% Recreation: Wages and Benefits – 64% Operation and Maintenance – 34% Capital Outlay – 2% Golf: Wages and Benefits – 52% Operation and Maintenance – 45% Capital Outlay – 3% Public Works: Wages and Benefits – 23% Operation and Maintenance – 38% Capital Outlay – 39% Public Works (General Fund): Wages and Benefits – 65% Operation and Maintenance – 33% Capital Outlay – 2% Streets: Wages and Benefits – 32% Operation and Maintenance – 68% Capital Outlay – 0% Water: Wages and Benefits – 15% Operation and Maintenance – 40% Capital Outlay – 45% Sewer: Wages and Benefits – 12% Operation and Maintenance – 32% Capital Outlay – 56% Sanitation: Wages and Benefits – 47% Operation and Maintenance – 35% Capital Outlay – 18% Library: Wages and Benefits – 62% Operation and Maintenance – 33% Capital Outlay – 5% Airport: Wages and Benefits – 15% Operation and Maintenance – 25% Capital Outlay – 60% Idaho Falls Power: Wages and Benefits – 13% Operation and Maintenance – 64% Capital Outlay – 23% Director Rockwood distributed information regarding the Municipal Equipment Replacement Fund (MERF) followed by discussion of the Council. The information included the following: MERF Equipment: Total Active Fleet Purchase Price – 32% Estimated Replacement Cost – 54% 3  JULY 13, 2015 Total MERF Fund – 12% 2015-2016 MERF Request – 2% Police MERF Equipment: Total Active Fleet Purchase Price – 33% Estimated Replacement Cost – 56% Total MERF Fund – 6% 2015-2016 MERF Request – 5% Fire MERF Equipment: Total Active Fleet Purchase Price – 36% Estimated Replacement Cost – 60% Total MERF Fund – 4% 2015-2016 MERF Request – 0% Parks MERF Equipment: Total Active Fleet Purchase Price – 33% Estimated Replacement Cost – 55% Total MERF Fund – 11% 2015-2016 MERF Request – 1% Streets MERF Equipment: Total Active Fleet Purchase Price – 32% Estimated Replacement Cost – 55% Total MERF Fund – 10% 2015-2016 MERF Request – 3% Golf MERF Equipment: Total Active Fleet Purchase Price – 30% Estimated Replacement Cost – 52% Total MERF Fund – 14% 2015-2016 MERF Request – 4% Water/Sewer MERF Equipment: Total Active Fleet Purchase Price – 29% Estimated Replacement Cost – 50% Total MERF Fund – 20% 2015-2016 MERF Request – 1% Sanitation MERF Equipment: Total Active Fleet Purchase Price – 29% Estimated Replacement Cost – 50% Total MERF Fund – 15% 2015-2016 MERF Request – 6% Ambulance MERF Equipment: Total Active Fleet Purchase Price – 33% Estimated Replacement Cost – 56% Total MERF Fund – 6% 2015-2016 MERF Request – 5% Idaho Falls Power MERF: Total Active Fleet Purchase Price – 31% Estimated Replacement Cost – 53% Total MERF Fund – 13% 2015-2016 MERF Request – 3% Director Rockwood stated the Council previously requested information from all directors regarding city owned property to determine if any property could be surplused. It was determined Idaho Falls Power could surplus one small item and Public Works Departments had two items for surplus. After a brief 4  JULY 13, 2015 discussion Councilmember Lehto requested a record of undeveloped property that the city has possessed for greater than ten (10) years. Director Rockwood shared the following information: Public Works Major Budgetary Issues 1- Street Division budget shortfall: $578,000 2- Sewer Division primary treatment project: $12,000,000 3- Water Division Facility Plan implementation & 20% rate increase 4- 17th St/Hitt Road intersection improvements (Requires General Fund contribution of approximately: $1,211,300) (Assumes 50/50 split of all project costs with City of Ammon) Municipal, Street, Bridge & Arterial, Street and Traffic Signal Fund Compilation Revenue Expenditure Municipal Capital Improvement Fund $718,700 - Street Capital Improvement Fund $2,240,000 $4,050,000 Bridge and Arterial Street Fund $100,000 $220,000 Traffic Signal Improvement Fund $600,000 $600,000 $3,658,700 $4,870,000 General Fund Required Contribution: $(1,211,300) Streets Division:  2014-2015 Budget: $5,348,363  2015-2016 Budget: $5,473,300 (102%)  Projected Revenue: $4,895,000 o Street Fund Balance (June 2015) approximately -$1,200,000 o Projected revenue includes $3,890,000 State, $1,000,000 General Fund and $5,000 miscellaneous receipts o Funding shortfall (budget vs revenue) approximately: $578,300 o Projected franchise fees collected from CableOne and Intermountain Gas total approximately $695,000 o Annual shortfall in street maintenance: $2,900,000 A discussion followed regarding Street Division funds including allocation of the franchise fees. Director Rockwood indicated foregone money could be used during high growth years and dedicated to the Street funds. Director Rockwood read the following statement regarding Fund Balances with recommendation to use as a guideline: As a general practice the city will strive to maintain total general fund discretionary unassigned fund balance equal to 25% or above of general fund expenditures for the last ended fiscal year. It is recognized by the Council that adequate unassigned fund balance is needed to mitigate current and future risks and to ensure stable tax rates. Fund balance levels are a crucial consideration of long-term financial planning. Fund balance, created as a result of active revenue and expenditure deviations from the budget, will be used to achieve and maintain the City’s minimum fund balance goals to meet the next year’s budget expenditure requirements. 5  JULY 13, 2015 He stated any excess revenues over expenditures will restore the General Fund balance. Director Rockwood stated the Fireman’s Retirement Fund has been reduced, therefore the City’s contribution will be reduced for the current year. The savings from this fund will be distributed throughout the budget for various items. Director Marsh and Mr. Argyle appeared to discuss employee benefits. The options have been discussed with the advisory committee and have been distributed to employees. Mr. Argyle stated increases from Blue Cross will be: 9.7% for medical benefits (negotiated from 11.7% increase), 12% for vision, and 4% for dental. There was a brief discussion regarding prescriptions. Mr. Argyle explained the two (2) options for PPO premium increases to employees with the proposed 3% COLA in wages and benefits versus the proposed COLA in wages only as follows: Rate Current Premium Option 1 Option 2 Employee $572.46 5% Employee Pretax 7.5% Employee Pretax Employee and Spouse $1,232.17 7.5% Dependent Cost 15% Dependent Cost Employee and 1 Child $796.02 $17.00 $28.62 $20.04 $42.93 $30.05 Employee and 2 or more Children $1,128.57 $49.83 $78.10 $54.67 $141.89 $99.32 Employee and Spouse Child(ren) $1,755.59 $28.46 $45.39 $31.77 $76.47 $53.53 Monthly Total $733,572.29 $44.75 $70.33 $49.23 $126.35 $88.45 Annual Total $8,802,867.48 $75.48 $117.36 $82.15 $220.40 $154.28 Employee Monthly Premium $47,733.37 $88,180.63 Employee Annual Premium $572,800.42 $1,058,186.20 Current Employee Monthly Premium $30,548.41 Current Employee Annual Premium $366,580.92 Difference Renewal (PPO, HSA, & Dental) Increase -$690,639.86 -$205,254.08 Including Employee Current Premium He stated most employees prefer the COLA in wages only. There would be no change to the HSA plan. A lengthy discussion followed. Director Rockwood stated the proposed budget reflects the 3% COLA in wages only. There being no further business, it was moved by Councilmember Marohn, seconded by Councilmember Ehardt, that the meeting adjourn at 4:55 p.m. _______________________________________ _____________________________________ CITY CLERK MAYOR 6