City Council

July 14, 2017 Budget Session The City Council of the City of Idaho Falls met in Special Council Meeting (Council Budget Session), Friday, July 14, 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 Barbara Ehardt Councilmember John B. Radford Councilmember David M. Smith Councilmember Ed Marohn Councilmember Michelle Ziel-Dingman Councilmember Thomas Hally Also present: Pamela Alexander, Municipal Services Director Mark Hagedorn, Controller Kenny McOmber, Treasurer Mark McBride, Police Chief Kami Morrison, Executive Assistant to the Mayor Dana Briggs, Economic Development Coordinator Jackie Flowers, Idaho Falls Power Director Ryan Tew, Human Resources Director 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 requested Director Alexander appear for follow-up discussion per Councilmember Smith’s request. This discussion regarded a July 13, 2017 Council Meeting agenda item requesting approval of AssetWorks, Inc., a fleet management system. Director Alexander stated the discussion included incorporating the fleet management system into the Cayenta system as Cayenta did not have a fleet asset management module. She indicated AssetWorks had been budgeted in the Municipal Equipment Replacement Fund (MERF). Councilmember Smith believes the funding for this item needs to come out of current funds, not the prior year MERF budget. Director Alexander stated staff’s recommendation was to utilize savings anticipated in the MERF to fund the software purchase for this year, in the amount of approximately $10,000. Additional funding will also be included in the 2017/18 budget year. Brief discussion followed regarding the MERF as well as encumbrances. Director Alexander indicated she will utilize funding from other sources if Council prefers. Mayor Casper believes while the MERF is for equipment replacement, AssetWorks specializes in management of equipment replacement. She believes it could make sense to fund the software purchase from the savings in the MERF. After brief comments, it was moved by Councilmember Smith, seconded by Councilmember Ehardt, to amend the agenda to include a motion to rescind a previous action, specifically item 5(A)(3) dated July 13, 2017, regarding the professional services agreement with AssetWorks. The good faith reason for amending the agenda is expediency, in order to prevent what may be an inappropriate expenditure by the City. The motion to amend the agenda will allow for a timely action to reconsider the item before a disbursement is made. And the motion to rescind will allow further information gathering and debate regarding the previous action. Roll call as follows: Aye – Councilmembers Smith, Hally, Dingman, Ehardt, Marohn. Nay – Councilmember Radford. Motion carried. It was then moved by Councilmember Smith, seconded by Councilmember Ehardt, to rescind Council’s action on item 5(A)(3) from the Council Meeting dated July 13, 2017. Mayor Casper requested discussion for this item be placed on the July 24 Council Work Session. Director Alexander concurred. Roll call as follows: Aye – Councilmembers Dingman, Marohn, Smith, Hally, Ehardt. Nay – Councilmember Radford. Motion carried. 1  July 14, 2017 Budget Session Police Department: Chief McBride presented the following: Funding Sources 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $802,637 $626,877 ($175,760) Chief McBride stated decrease in Charges for Services are mainly within Animal Control Services. There is also a decrease in several grants, including Idaho Transportation Department (ITD) grants. Councilmember Marohn believes as the City grows additional people are needed and potential grants could have been used to assist with hiring costs. Brief discussion followed. Expenditures 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $13,858,397 $14,461,023 $721,627 Brief discussion followed regarding $417,354 increase in Wages and Benefits. Chief McBride stated there are no new positions, however the Police Department is the second largest workforce within the City with 140 total employees, including part time staff. Operational Expenses includes a request for a building consultant as well as a substantial increase in snow removal. Capital Outlay includes two (2) additional vehicles for new officers. Inter-fund transfers includes fees for dispatch. Discussion followed regarding the MERF. Director Alexander stated any savings occurring in the MERF stays within the department. Priorities: One-time Cost Ongoing Cost 1. Fleet patrol vehicle $94,400.00 2. VM ESXI Server pair (report writing system) $30,000.00 3. Refrigeration System and Freezer $16,441.47 4. MERF – Crematorium (5-year replacement) $16,666.00 5. Professional Services – New Building Consultant $150,000.00 Chief McBride stated additional items for future requests will include a crime scene extraction system, crime scene trailer, remodel upgrade to the report room, and equipment storage. Councilmember Dingman believes priority requests are reasonable. She encouraged Council to look at the current space for law enforcement as she believes a new Law Enforcement Building (LEB) is needed. Brief discussion followed regarding the lease agreement of the LEB. It was moved by Councilmember Smith, seconded by Councilmember Marohn, to accept the tentative budget as presented by the Police Department. Roll call as follows: Aye – Councilmembers Radford, Ehardt, Smith, Marohn, Dingman, Hally. Nay – none. Motion carried. Mayor, City Council, and Targhee Regional Public Transportation Authority (TRPTA): Mayor Casper introduced Kami Morrison, who also administers budget for the Council, to present the following: Mayor’s Office Budget Overview Ms. Morrison stated there are no Funding Sources, the Mayor’s Office serves as an administrative function only. Expenditures 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $245,876 $244,514 ($1,362) Ms. Morrison stated Wages and Benefits increase includes a new Public Information Officer (PIO) intern. Inter-Fund Transfers includes time allocation to other departments. Mayor Casper stated the Mayor’s Office currently has 2.5 employees; an Executive Assistant, a PIO (equally funded by Idaho Falls Power), and an Economic Development Coordinator. She reviewed duties of each staff member. Priorities: One-time Cost Ongoing Cost 1. Communications Team/PIO Function $32,500 2  July 14, 2017 Budget Session Mayor Casper believes the realm of a PIO is ever evolving and plays a critical role for public communication. She indicated the City has multiple social media accounts and managing the accounts are very time consuming. She believes there is concern for one (1) PIO to maintain the workload of ten (10) departments of the City and to be available on a continual (24/7) basis. She believes this current workload for the Ms. Hammon has become unreasonable. Director Tew concurred. Mayor Casper reviewed current ad hoc and ongoing City teams and proposed a Communications Team consisting of one (1) Full-time Employee (FTE) City-wide PIO, ½ FTE Police Department PIO, ½ FTE Parks and Recreation PIO, one (1) FTE PIO shared by Fire Department and Public Works, and one (1) Intern (Communications or Marketing Student). She indicated Department Directors were in favor of additional PIO resources. Funding source amounts will vary between departments, with the exception of the Legal Department which will not contribute due to liability concerns. Mayor Casper believes the Communications Team could also assist with internal communication/messaging. Councilmember Radford believes a part-time employee may be a better solution than an intern, who tends to have more frequent turn-around. Brief discussion followed regarding internship. Council Budget Overview: There are no Funding Sources. Expenditures 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $5,294,702 $470,338 ($4,824,364) Ms. Morrison stated decrease in Operational Expenses are due to no Airshow in the following year. Inter-Fund Transfers decrease is due to Council-approved transfer to the Street Fund. Mr. Hagedorn stated when Council authorizes a transfer, this is noted as an expenditure. Ms. Morrison reviewed the Council travel budget as it was requested the travel budget be increased to allow training for Councilmembers. Mr. Hagedorn stated the travel fund is un-allocable. Ms. Morrison reviewed Community Support and TRPTA funding. After brief discussion, it was decided to create a sub-division within the Council budget to include Community Support, TRPTA, and Association of Idaho Cities (AIC) membership fees. Priorities: One-time Cost Ongoing Cost 1. Director Salaries $40,000 Mayor Casper indicated the request is to increase Department Directors wages whose current wages may be less than market value. She believes the wage increase is incentive to maintain the current Directors. Director Tew indicated this amount averages to approximately 2.5%, which also includes benefits. Mr. Hagedorn proposed a contingency fund, for items which would be allocated at a later time. This fund would be a budgetary placeholder only. He indicated this fund would also allow for unplanned events (acceptance of grants, donations, etc). The requested amount of $6m is currently located in the General Fund. Mr. Hagedorn stated this amount includes a Provision Retirement of $1.2m. He indicated there are 45 employees eligible in the upcoming year for retirement with payout amount of approximately $1.5m. He reviewed separation and retirement payouts from FY2010-FY2016. He stated the sick leave payout makes the retirement payout more difficult to manage. Director Tew indicated a vacation payout will change dramatically if a vacation change is implemented. It was moved by Councilmember Smith, seconded by Councilmember Marohn, to accept the Mayor and Council budgets as tentatively presented. Roll call as follows: Aye – Councilmembers Hally, Marohn, Radford, Dingman, Smith, Ehardt. Nay – none. Motion carried. Legal Department: Mr. Fife stated there are no requests for the FY2017/18 budget, any increases are for standard inflation items. He indicated a request will potentially be submitted in the following year for software costs for the court system. 3  July 14, 2017 Budget Session Expenditures 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $871,662 $938,240 $66,578 Mr. Fife briefly reviewed the court costs with comparison of similar staff, indicating they are reasonable. Staffing levels for comparison of costs are unknown. He stated the trend of ticket writing has decreased although the cost has increased. He also stated collections for fines and costs have increased. Discussion followed regarding the Magistrate Court costs. It was decided the $250,000 placeholder for the Magistrate Court funding will be relocated to the Legal Administration budget. It was moved by Councilmember Smith, seconded by Councilmember Marohn, to accept the tentative budget from the Legal Department. Roll call as follows: Aye – Councilmembers Ehardt, Radford, Smith, Marohn, Dingman, Hally. Nay – none. Motion carried. Idaho Falls Power (IFP): Director Flowers presented the following: Funding Sources 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $48,240,715 $50,527,576 $2,286,861 Director Flowers stated Contributed Capital/Developer Fees increase is largely due to line extension fees. She stated the grant through Idaho State Parks & Recreation Department for the Gem Lake Marina dock and boat ramp was approved in the amount of $122,000. Expenditures 2016/17 Budget 2017/18 Proposed Budget Increase or Decrease Total $56,685,721 $60,573,271 $3,887,550 Director Flowers stated IFP has continued to make adjustments to coincide with the Cost of Service model. There is no proposal of staff increase except for staff adjustments within the power plants. There is also no request for an additional slice scheduler. There is an increase for the market-based compensation scale, mainly for non-union employees. She stated overall budgetary expenditures at Gem State have decreased largely due to the completion of dike work. Increase in Transmission is largely due to capital projects, including the Heritage Park line relocation project. This project has also been included in revenue source. Brief discussion followed regarding locating a substation near Sandy Downs. Distribution increase is also largely due to capital projects which will include development projects. Director Flowers stated A&G operation costs include a $1.2m increase for slice full service, as an insurance policy. She briefly reviewed Warehouse, Engineering, and Energy Services including modifications to the Energy Center. She stated the majority of increase within Fiber is for capital projects including a possible pilot program. Brief discussion followed regarding accommodation of lighting for future July 4th firework displays. Director Flowers stated IFP will be requesting a rate increase to all customers effective October 1, 2017. She stated in 2015 IFP absorbed a 9% increase from Bonneville Power Administration (BPA) and power rates were also decreased. She anticipates a 6% rate increase from BPA which cannot be absorbed. She stated transmission costs continue to increase which will also affect IFP rates. She indicated supplemental support of The Energy Authority (TEA) will continue at this point. Director Flowers stated IFP is proposing to phase in the increase over the course of the following two (2) years. The increase is scheduled to generate approximately $1.7m in revenue. She reviewed the proposed increases which are based on the Cost of Service model. IFP is proposing a slight credit in the Power Cost Adjustment, which will be included on utility billing statements. Brief discussion followed regarding customer use relative to the proposed rate increase as well as increasing rates in one (1) year versus a phased-in approach. There was consensus of the Council to increase the rates in one (1) year. Director Flowers proposed the Line Extension Fee for Single Family Home be phased in. This only affects residential customers. Residential Transfer Customer Fee would be incurred to those who have been annexed into the City and have requested a Rocky Mountain Power buyout. This fee is anticipated to occur for approximately three (3) years until the costs for buyout have been fulfilled. Director Flowers indicated meetings will occur with the neighbors regarding this fee. 4  July 14, 2017 Budget Session Priorities: One-time Cost Ongoing Cost 1. Complete and develop implementing strategies for Strategic Plan initiatives 2. Operational excellence initiatives: focus on data collection, monitoring, analytics to drive initiatives (capital investment, program development) 3. Capital expansions to support large development projects while maintaining cost causation principles established in cost of service 4. Continue with expansion of Capital Improvement Projects (CIP) projection on the 10 year horizon to smooth cash investments in rate analysis 5. Continue progress on enhancing system capacity and reliability in growth areas There was no motion to accept the tentative budget for IFP due to the proposed rate increase which will change revenues and expenditures. Follow-up Discussion: Councilmember Marohn stated discussion regarding General Fund expenditures will occur at the July 18 Budget Session. There being no further business, the meeting adjourned at 5:28 p.m. s/ Kathy Hampton s/ Rebecca L. Noah Casper CITY CLERK MAYOR 5