City Council

JULY 19, 2016 The City Council of the City of Idaho Falls met in Special Council Meeting (Council Budget Session), Tuesday, July 19, 2016, 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 Michelle Ziel-Dingman Councilmember John B. Radford (arrived at 2:10) Councilmember Ed Marohn Councilmember David M. Smith Councilmember Thomas Hally Councilmember Barbara Ehardt Also present: Pam Alexander, Municipal Services Director Mark Hagedorn, Controller Kenny McOmber, Treasurer Kerry Hammon, Public Information Officer Kathy Hampton, City Clerk Mayor Casper called the meeting to order at 2:02 p.m. with the following: Opening Remarks/Announcements: Mayor Casper reminded the Councilmembers of the July 24, Work Session, with an executive session to follow. Follow-up Discussion of Proposed Fiscal Year 2016/2017 Budget: Director Alexander reviewed the upcoming budget schedule: July 26, additional follow-up discussion July 28, Regular Council Meeting, including tentative approval of the FY2016/2017 budget July 31 and August 7, publication of the FY2016/2017 proposed budget for public hearing to be held at the August 11, Regular Council Meeting August 22, Council Work Session – approval of Appropriation Ordinance for FY2016/2017 budget Health Insurance Options were reviewed. Councilmember Marohn recommended Council review departmental budgets with regard to revenue, cash reserves, and any available cash balance, as these amounts could be affected by Council’s decision of health insurance option. Per Council request, two (2) additional Health Insurance Options were reviewed: City Contribution Employee PPO Employee HSA Policy (Monthly) * (Monthly) * Option 2, $9,984,593 $57.10-$203.46 $14.34-$96.59 50%-50% split of increase, 90% City, revised employee 10% Option 5A $10,220,517 $-- $28.68-$140.66 Consumer driven plan; City 93%, employee 7% *Ranges estimated based on plan selection Councilmember Ehardt believes insurance decisions need to be long-term driven as benefits are continually increasing. Councilmember Marohn stated City contribution is not sustainable for the City and believes employees share needs to increase. Councilmember Radford believes a representative from each department should be involved in benefits problem solving. Mayor Casper stated, at this time, the benefits advisory committee has been 1  JULY 19, 2016 dissolved. After general discussion, Councilmembers requested additional health insurance options to be discussed at the July 26, Council Budget Session. Mayor Casper stated the Benefits Fair has been scheduled for August 23, which will include workshops for any insurance questions. Brief discussion followed regarding open enrollment. Director Alexander reviewed the 1.75% proposed increase of Inflation and Wage Adjustment. Estimated cost to the City would amount to $683,681 to the General Fund. Councilmember Smith stated Idaho, regional, and national statistics indicate the average wage adjustment is 1.78%. After brief discussion, it was decided the 1.75% wage adjustment increase would be included in the $800,000 placeholder to the FY2016/17 budget. Director Alexander reviewed Budget Overview, including amounts of Health Insurance Option 2 revised, as well as the 1.75% Wage Adjustment Calculations, as follows: Funding Sources 2015/16 Approved 2016/17 Department Increase or Decrease Budget Requested Budget Charges for Services $83,760,658 $86,420,148 $2,659,490 Property and Franchise Taxes $30,187,106 $30,385,720 $ 198,614 State Shared Revenues $ 7,851,000 $ 8,008,000 $ 157,000 Inter-Governmental $ 7,194,182 $ 8,213,472 $1,019,290 Payment In-Lieu of Taxes $ 4,628,460 $ 4,595,033 ($ 33,427) Grants $ 6,005,049 $ 6,830,429 $ 825,380 Miscellaneous $ 8,431,401 $ 5,194,417 ($3,236,984) Fund Balance $43,599,594 $51,882,604 $8,283,010 Total $191,657,450 $201,529,823 $9,872,373 Enterprise Fund will not change. Expenditures 2015/16 Approved 2016/17 Department Increase or Decrease Budget Requested Budget Wages and Benefits $62,575,060 $64,417,194 $1,842,134 Operational Expenses $78,614,812 $77,046,079 $(1,568,733) Capital Outlay $53,256,881 $47,969,854 $(5,287,027) Depreciation $ 2,972,450 $2,947,400 $(25,250) Debt Service $ 1,100,000 $1,100,000 $ -- Inter-Fund Transfers $(10,362,303) $(10,586,204) $ (223,901) Adjustments $ -- $5,545,868 $5,545,868 Subtotal $188,156,900 $188,439,991 $283,091 Budget Requests $3,500,550 $13,089,832 $ 9,859,282 Total $191,657,450 $201,529,823 $9,872,373 General Fund Discussion: Mr. Hagedorn reviewed the General Fund revenue process. He stated all grants monies are deposited into the General Fund for reporting purposes and are then directed to individual departments. The new software system, Cayenta, will change the reporting function. Property Tax Discussion: Mr. Hagedorn stated the evaluation from Bonneville County is received on August 1. He indicated as valuation increases, levy rates decrease and vice versa due to certification of whole dollars and not rates. Bonneville County 2  JULY 19, 2016 calculates the levy rate, not the City of Idaho Falls. Mr. Hagedorn reviewed the process of the levy. He stated there are new rules for foregone money which now includes a special budget session. Maximum levy rates established by Association of Idaho Cities (AIC) are as follows: Taxing Authority Idaho Code Maximum Rate Streets 50-312 No Limit Library 33-2603 0.001 Recreation 50-303 0.0006 Capital Improvement Fund 50-236 0.0004 General Fund 50-235 0.009 Mr. Hagedorn stated any subcategories in the General Fund must follow the maximum levy rate. He stated valuation rates received from Bonneville County vary on a monthly basis, Bonneville County evaluation is completed every five (5) years. Discussion followed regarding levy rates, new construction, and annexation monies. Mr. Hagedorn reviewed the following: Calculations of Changes to Levy Rate, Tax Dollars, and Foregone – 2016-2017 Budget Year Net Taxable Market Value: 3,089,953,275 Current Property Tax Dollars: $28,766,486 Current Levy Rate: 0.009561859 Current Foregone: $6,749,150 Amount that can be Levied: $36,821,799 Levy % Levy Rate Increase Tax Dollars Tax Dollar Foregone $ Change Increase (Decrease) Increase Amount per 100K Current year dollars -2.500% 0.009322813 $40,571 $28,807,057 0.141% $8,014,742 (23.90) Current year levy 0.000% 0.009561859 $799,212 $29,545,698 2.709% $7,276,101 0.00 3% Statutory allowable 0.250% 0.009585764 $853,077 $29,619,563 2.966% $7,202,236 2.39 increase Keep Foregone the 1.750% 0.009729192 $1,296,263 $30,062,749 4.506% $6,759,050 16.73 same Mr. Hagedorn presented a Property Tax Levy Calculation Exercise including General Fund (Liability Insurance and Fire Retirement), Streets, Library, Recreation Fund, and Capital Improvement Funds (Fire Station and Municipal Capital Improvement), with total of property tax revenue certified to Bonneville County at $30,072,649 and Foregone amount of $6,749,150. Brief discussion followed regarding the Parks Capital Improvement Fund (PCIF), which was created in FY2014/2015 based on $1 surcharges. Mr. Hagedorn stated the PCIP was not designed to include all Parks and Recreation improvements, only for expenditures related to those surcharges. He indicated the Street Fund is underfunded by $1.4 million, the Recreation Fund has decreased as well. Use of $9 million from the General Fund reserves would reduce best practice of 25%. Director Alexander prefers to have forecasting exercise as a future plan to sustain the City. Councilmember Marohn recommended Council be prepared for additional discussion of the levy rate at the July 26, Council Budget Session. Director Alexander will prepare an updated worksheet. Brief discussion followed regarding borrowing. Mr. Hagedorn stated the annual budget is generally between $170-$200 million, with actual expenditures of approximately $150 million. Department requests, separated by General Fund and Enterprise Fund, were briefly reviewed. Community Support: Councilmember Smith briefly reviewed the community support applications for required criteria. He believes the only request that meets grant/support criteria is Hospice of Eastern Idaho. General discussion followed. 3  JULY 19, 2016 Councilmember Ehardt believes the decision to fund the Airshow should be revised to allow reimbursement of expenses. Councilmember Radford indicated the City will provide service for Airshow requests but believes the Council should be more responsible with the placeholder to plan for the expense. There being no further business, it was moved by Councilmember Smith, seconded by Councilmember Dingman, to adjourn the meeting at 5:05 p.m., which motion passed following a unanimous vote. s/ Kathy Hampton s/ Rebecca L. Noah Casper CITY CLERK MAYOR 4