City Council

July 11, 2017 Budget Session The City Council of the City of Idaho Falls met in Special Council Meeting (Council Budget Session), Tuesday, July 11, 2017, at the City Council Chambers in the City Annex Building located at 680 Park Avenue in Idaho Falls, Idaho at 1:00 p.m. There were present: Mayor Rebecca L. Noah Casper Councilmember Thomas Hally Councilmember Ed Marohn Councilmember Michelle Ziel-Dingman Councilmember John B. Radford Councilmember David M. Smith Councilmember Barbara Ehardt Also present: Pamela Alexander, Municipal Services Director Mark Hagedorn, Controller Kenny McOmber, Treasurer Megan Randall, Controller’s Office Intern Craig Davis, Idaho Falls Airport Director Chris Fredericksen, Public Works Director Robert Wright, Idaho Falls Library Director Mary Lund, Library Board Vice Chair Ryan Tew, Human Resources Director Mindy Moore, Human Resources Analyst Randy Fife, City Attorney Kerry Hammon, Public Information Officer Kathy Hampton, City Clerk Mayor Casper called the meeting to order at 1:00 p.m. with the following: Opening Remarks: Mayor Casper expressed her appreciation to the Councilmembers for making appropriate arrangements for the several 2017/18 budget presentations. She reviewed the process for the current years’ presentations which will include department presentations, a general overview of the budget, and time allocated for informal discussions. Mayor Casper stated, due to a previous presentation in May 2017 there will be no additional formal discussion regarding employee benefits and wages. She indicated, per that presentation, no increase to insurance benefits and a 2.5% inflation increase has been incorporated into department budgets. Mayor Casper stated the City budget is affected by many external factors, including the County certification of valuation (estimation of valuation of property within the City). She stated the current year indicates higher valuation amounts as well as higher new growth amounts than the previous year. She believes many City residents may have received property tax assessment increases for the current year, which is a rolling process for the County Assessor's Office. Mayor Casper briefly reviewed additional budget preparations including Budget Watch, individual Department Director meetings, and submittal of proposed fees. She stated the basic budget, consisting of basic administrative needs, has been distributed to the Councilmembers. She indicated a transition phase of the budget continues to occur each year and transparency continues to be a goal. As the budget process proceeds, Mayor Casper requested the Council be true to the governing values as determined by Priority Based Budgeting. She believes the higher impact decisions have been seeded by the elected officials for the livelihood of citizens. Director Alexander briefly reviewed the budget calendar highlighting the following: Tuesday, July 25 – budget overview Thursday, July 27 – tentative approval of 2017/18 budget and fees Thursday, August 17 – public hearing for 2017/18 budget and fees Tuesday, August 22 – Council discussion of public hearing comments and proposed revisions 1  July 11, 2017 Budget Session Thursday, August 24 – adopt budget ordinance Director Alexander indicated all budgets are available on the City website for public information/engagement. She reiterated this is basic budget information, updated worksheets will continue to be distributed. Councilmember Marohn indicated, per State requirements, the tentative budget including the proposed fees will be published August 6 and 13. He reminded the Council to interject questions/comments as needed during the individual department presentations, specifically regarding larger budget items. He briefly reviewed the budget worksheets. Idaho Falls Airport: Director Davis presented the following: Funding Sources 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $7,816,487 $12,008,595 +$4,192,108 Director Davis stated increases are due to anticipated revenues from the rental car agencies, new private hangar leases, and grants, including grant carryover. Expenditures 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $9,279,475 $12,375,516 +$3,096,041 Director Davis stated increases include anticipated federal grants, including grant carryover, improvements to the Access Control System, and other equipment replacement. Priorities: One-time Cost Ongoing Cost 1. 2017/2018 FAA Capital Improvement Projects $531,000 $0 2. Bring existing part-time custodian position to full-time $0 $9,959 + benefits 3. Sustain federally mandated LEO coverage $0 $27,983 4. Sustain federally mandated ARFF coverage $0 $32,000 Capital Improvement Plan: FY 2018 – Runway 2/20 signs and marking, rehabilitate Taxiway A North and Runway 2/20, modify/rehabilitate Terminal North FY 2019 – relocate Taxiway B, acquire land/easement, update Airport Master Plan, Taxiway A safety area improvements, replace existing loading bridges FY 2020 – relocate Taxiway B FY 2021 – rehabilitate North Apron, pavement maintenance, snow removal equipment multi-use FY 2022 – rehabilitate North Apron, ARFF vehicle, relocate/dopplerize NAVAID-VOR FY 2023 – rehabilitate existing or construct new Air Traffic Control Tower Bottom Line: Revenues Expenditure Request Total $12,008,595 $12,375,516 $366,921 $12,375,516 Current Airport reserves = $2.1million Brief discussion followed regarding the Airport reserves. Director Davis stated the Idaho Falls Airport is not subsidized by the City. He reviewed the previous three (3) years of revenues and expenditures as well as budget analysis worksheets indicating any increases/decreases for Administration, Building Maintenance, Ground Maintenance, Airport Security, Airport Fire Protection, and Airport Improvements. Councilmember Radford commended Director Davis and previous management of the Airport. At the request of Mayor Casper, Director Davis gave a brief update of airline service carriers as well as issues regarding the air traffic control tower related to federal discussions. He believes there is no concern at this time regarding the control tower. Director Davis expressed his appreciation to the Airport staff for their assistance with the Blue Thunder Air Show scheduled for July 22 and 23. 2  July 11, 2017 Budget Session It was moved by Councilmember Smith, seconded by Councilmember Marohn, to accept the Airport tentative budget as presented. Roll call as follows: Aye – Councilmembers Radford, Ehardt, Smith, Marohn, Dingman, Hally. Nay – none. Motion carried. Public Works: Director Fredericksen expressed his appreciation to Municipal Services staff for their assistance with budgetary items. He stated overall there is a proposed reduction of approximately 21% for the Public Works budget. He stated this is mainly due to capital improvement projects. At the request of Councilmember Radford, Director Fredericksen stated the overall project for 17th Street and Hitt Road intersection improvements was anticipated at $2.2m. Due to a collaboration in projects, the overall project came in under budget although specific numbers were not readily available. General discussion followed regarding Idaho Transportation Department (ITD) funding. Director Fredericksen reviewed previous three (3) years of revenues and expenditures. He stated the decrease of revenue from the previous year is partially due to inter-fund transfers or one-time expenditures. Director Fredericksen reviewed the seven (7) crucial requests to the Public Works budget: 1. Public Works – budget increase of $25,000 for Public Information Officer (PIO) salary sharing. Remaining increases largely due to salaries and benefits. 2. Street Administration – no change in funding for snow removal, but intends to work with Municipal Services to establish Snow Removal Fund to accrue savings in lean snow years. 3. Engineering Division – decrease in engineering overall budget as Signing and Striping budget line items, including full time and temporary employee salaries and benefits, have been moved to Street Division. Salary and benefit costs have been increased for new full time employee. 4. Street Division – increase in budget by $530,549 of which approximately $376,800 is cost transfer of Signing and Striping. Additionally, a paver of $140,000 has been included within this budget request. 5. Water Division – increase in budget by $522,905 spread over the entire division. Rate increase request of 5% is included. Salary and benefits included for new full time employee for meter installation. 6. Sanitation Division – decrease in sanitation overall budget as autoload trucks and equipment have been purchased and full time employees have been reduced from 28 to 22. Rate increase to cover Bonneville County landfill fees are included. 7. Wastewater Division – decrease in overall budget largely due to Wastewater Treatment Plant (WWTP) Primary Upgrade project. The project is under construction and will be completed in the upcoming budget year. Assuming that $200,000 will be spent on construction inspection and $3.2m on construction in current budget. Remainder of the $7.8m budgeted in upcoming budget will need to be re-evaluated. Director Fredericksen stated the Water and Sewer fund currently has approximately $30m which could be utilized as well. The Wastewater and Water funds will be split in the Cayenta conversion. Public Works Budget Overview Funding Sources 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $37,450,345 $32,692,400 ($4,757,945) Public Works Budget Overview – Includes Public Works, GIS, Engineering and Snow Removal Expenditures 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $2,048,690 $1,790,143 ($258,547) Street Division Budget Overview Expenditures 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $6,320,324 $6,850,873 $530,549 Director Fredericksen stated due to Council approved allocation in the previous year, this is the first time the Street Division has been fully funded. He expressed his appreciation to the elected officials. Brief general discussion followed regarding street paving/chipping and the proposed purchase of a paver. 3  July 11, 2017 Budget Session Special Fund Budget Overview Expenditures 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $8,055,000 $4,385,000 ($3,670,000) Brief discussion followed regarding current and proposed capital improvement projects. Sanitation Division Budget Overview Expenditures 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $4,949,830 $4,632,556 ($317,274) Brief discussion followed regarding autoload/sanitation containers and the County landfill fees. Water Division Budget Overview Expenditures 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $10,333,651 $10,856,556 $522,905 Director Fredericksen stated approximately 1% of underground water line replacement continues on an annual basis. Brief discussion followed regarding Municipal Equipment Replacement Fund (MERF). Director Fredericksen believes a goal for replacement of equipment needs to be established. Wastewater Division Budget Overview Expenditures 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $23,910,530 $17,615,443 ($6,295,087) Brief discussion followed regarding the Wastewater Treatment Plant project included in Capital Outlay. Priorities: One-time Cost Ongoing Cost 1. Street Division – paved street maintenance (paver) $140,000 Negligible 2. Elm Street and South Boulevard Roundabout $750,000 N/A 3. Snow Removal Fund – Accruing Unspent Balance N/A N/A 4. Water and Wastewater Rate and Connective Fee Increase – Meter N/A N/A Install (contract VS full time employee) 5. Engineering new employee – engineer-in-training $88,000 Brief discussion followed regarding snow removal. Director Fredericksen indicated there was approximately 20% cost decrease with the new snow removal policy. Councilmember Ehardt believes additional funding should be allocated to the Snow Removal Fund. It was moved by Councilmember Smith, seconded by Councilmember Marohn, to accept the tentative budget as presented by Public Works. Councilmember Marohn stated the department budgets can be re-discussed at any time. Roll call as follows: Aye – Councilmembers Hally, Smith, Radford, Dingman, Ehardt, Marohn. Nay – none. Motion carried. Idaho Falls Library: Director Wright presented the following: Funding Sources 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $3,282,620 $3,270,412 ($12,208) Director Wright stated the contract with the Library District expires September 30. Negotiations are currently in process regarding this contract. Councilmember Radford stated this contract is very important. Director Wright indicated for every $1 received from the City, .48 is received from the Bonneville County Library District. He stated a public Library is a government-sponsored institution without bias and the Library sees many citizens from all communities. Director Wright stated the Library sees approximately 70,000-90,000 people in the summer months, and approximately 50,000-70,000 people in the winter months. There are approximately 6600 children enrolled in summer reading programs with additional activities/programs through the school districts. 4  July 11, 2017 Budget Session Expenditures 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $3,263,006 $3,415,649 $158,060 Director Wright stated he would like to make the Library more user friendly area including heated sidewalks. Brief discussion followed regarding seasonal/temporary employees, grants, and library fines. Director Wright stated the goal is to get as many people as possible to use the Library without worrying about fines. Director Wright stated the Fund Balance is approximately $1.5m. He believes the City will need more space for the Library within the next several years. Possible options could be to build a branch Library or purchase the Ferrell’s Building, which would be a cost saving over the course of time. He stated the engineering report is currently being conducted on the Ferrell’s Building. At the request of Mayor Casper, Director Wright explained the Coding for Kids program, a program that teaches independent-reading kids how to code computer. Director Wright briefly reviewed the levy rate related to employees wage and benefits increase. Councilmember Marohn stated the current levy rate is .000591052, the statutory limit is 1 mill. He commended the Library staff for a well-funded operation. Director Wright expressed his appreciation to the Council for their support of the Library. It was moved by Councilmember Smith, seconded by Councilmember Marohn, to accept the tentative budget as presented by the Library. Roll call as follows: Aye – Councilmembers Hally, Smith, Dingman, Ehardt, Marohn, Radford. Nay – none. Motion carried. Human Resources: Director Tew presented the following: Funding Sources – None Expenditures 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $389,115 $417,379 $28,264 Director Tew stated the Wellness Category funds have been reallocated to Operational Expenses. Inter-fund transfer increase is due to the staff size relative to other City departments. Brief discussion followed regarding Human Resources (HR) staff. It was moved by Councilmember Smith, seconded by Councilmember Hally, to accept the Human Resources tentative budget. Roll call as follows: Aye – Councilmembers Dingman, Smith, Marohn, Ehardt, Hally, Radford. Nay – none. Motion carried. Director Tew stated an upgraded vacation policy is the highest priority of benefits at this time. He indicated this is not considered a budgetary item, this is a policy change. He then turned the time to Ms. Moore for presentation of Vacation Policy change/upgrade with general discussion throughout: Ms. Moore stated the current rate of accrual is based on length of service and employment status as follows: 1 - 6 years, 88 hours, 3.6 hours per pay period 7 - 14 years, 128 hours per year, 5.3 hours per pay period 15 - 20 years, 168 hours per year, 7 hours per pay period More than 20 years, 184 hours per year, 7.6 hours per pay period Ms. Moore stated candidates are turning down job offers due to the vacation accrual, resulting in the second or third applicant choice. She indicated offering a better vacation accrual acknowledges that employees have demands and interests beyond work. She stated, according to a Human Resources survey, using vacation time leads to higher performance (75%) and increased job satisfaction (78%). Ms. Moore reviewed vacation hours of other public and private entities. She stated the average number of days used nationally in 2010 = 20.9 days. She also stated the company trend is moving toward PTO (personal time off). Proposals as follows: Proposal 1: 1 - 4 years = 120 hours, 5 - 9 years = 160 hours, 10 - 14 years = 180 hours, 15 - 19 years = 200 hours, 20 years = 240 hours 5  July 11, 2017 Budget Session Proposal 2: 1 - 4 years = 144 hours, 5 - 9 years = 168 hours, 10 - 14 years = 184 hours, 15 - 19 years = 224 hours, 20 years = 240 hours Proposal 3: 1 - 4 years = 160 hours, 5 - 9 years = 180 hours, 10 - 14 years = 200 hours, 15 - 19 years = 220 hours, 20 years = 240 hours Proposal 4: 1 - 4 years = 192 hours, 5 - 9 years = 240 hours, 10 - 14 years = 288 hours, 15 years+ = 336 hours, 20 years = 240 hours Cost related factors:  Hours accrued are maxed at 368 hours, rollover allowance each January is 184 hours  Unrealized costs  Additional cost realized by the City only occurs at payout and when another employee is required to fill-in Separation Year 1 2 3 4 5 Max Hours Current Policy 87.6 88 88 88 16.4 368 Proposal 1 120 120 120 8 368 Proposal 2 144 144 80 368 Proposal 3 160 160 48 368 Proposal 4 192 176 368  Salary savings for recruitment time Ms. Moore stated the turn-over rate is approximately 8.5% (16 to 17 employees leave within the first year). She reviewed proposals as follows: Proposal 1 (120 hours) $140,656.41 8.5 $15,547.81 Proposal 2 (144 hours) $246,148.65 8.5 $28,958.66 Proposal 3 (160 hours) $316,476.81 8.5 $37,232.57 Proposal 4 (192 hours) $457,133.13 8.5 $53,780.37 Director Tew believes the City is losing the recruiting edge when employee balance is not provided. He indicated there is minimal expense to make a dramatic change with the vacation policy. He believes the advantages of morale and retention outweigh the payout. Councilmember Marohn believes use of vacation teaches employees behavior modification. General discussion followed. Mayor Casper recommended HR staff present proposals with a more comprehensive look with fiscal implications. Councilmember Hally concurred. Councilmember Marohn believes the vacation should be increased but he is not in favor of a payout. Councilmember Ehardt concurred. Mayor Casper requested additional data requested by the Council be submitted to HR as soon as possible. Councilmember Smith prefers a review of the entire compensation policy. Brief discussion followed regarding sick leave policy. Ms. Moore believes the sick policy is competitive although she believes there should be a cap on sick leave accrual. Follow-up Discussion: Brief discussion occurred regarding MERF. Director Alexander reviewed a proposed professional services agreement for fleet management, which will be included on the July 13, 2017 Council Meeting Agenda. This agreement will assist with the MERF. Mayor Casper requested Council approval for the July 12 Council Budget Session to begin at 1:30 due to a community event that has requested her attendance. Council concurred. There being no further business, the meeting adjourned at 5:05 p.m. s/ Kathy Hampton s/ Rebecca L. Noah Casper CITY CLERK MAYOR 6