City Council

July 15, 2020 Budget Session The City Council of the City of Idaho Falls met in Council Budget Session, Wednesday, July 15, 2020, at the City Council Chambers in the City Annex Building located at 680 Park Avenue in Idaho Falls, Idaho at 8:30 a.m. There were present: Mayor Rebecca L. Noah Casper Councilmember Michelle Ziel-Dingman Councilmember John Radford (by WebEx) Councilmember Thomas Hally Councilmember Jim Freeman Councilmember Jim Francis Councilmember Shelly Smede Also present: Pamela Alexander, Municipal Services Director Mark Hagedorn, Controller Josh Roos, Treasurer Bear Prairie, Idaho Falls Power Director (by WebEx) Stephen Boorman, Idaho Falls Power Assistant Director Chris Fredericksen, Public Works Director Brad Cramer, Community Development Services Director Ed Morgan, Civic Center for the Performing Arts Manager Randy Fife, City Attorney Kathy Hampton, City Clerk Mayor Casper called the meeting to order at 8:32 a.m. with the following: Opening Remarks, Announcements: Mayor Casper stated it is a privilege to work with the elected officials and staff for their high degree of commitment and success for the community. She believes the City is doing excellent things for good reasons for the people in the community. Mayor Casper stated she recently attended the Eastern Idaho Public Health (EIPH) District Board Meeting, noting that multiple physicians spoke. She believes the board was re-educated about the Coronavirus (COVID-19) pandemic impact on the region. She stated the document, dedicated to public health, adopted by EIPH will be available in the near future. She also stated EIPH staff will be available the morning of June 22 for a presentation to the Council. An additional budget session will follow this presentation. Mayor Casper stated a presentation from Utah Associated Municipal Power Systems (UAMPS) will occur at an Idaho Falls Power (IFP) Board Meeting on June 21. Introductory Remarks as Needed: Director Alexander expressed her appreciation to all directors for submitting their presentations in a timely manner. Department Budget Review: Idaho Falls Power (IFP) – Director Prairie reviewed the following with general discussion throughout: Department Structure: Power Generation, Power Transmission and Distribution, Wholesale Power Purchases and Sales, Customer Service, Administration and General Support Services, Power Engineering, and, traffic lights. IFP also manages the Rate Stabilization Fund and the Capital Improvement Fund. Department Budget Overview 2020/21 2020/21 2020/21 2019/20 2019/20 Proposed Proposed $ Change % Change Proposed Department Expenditure Revenue Expenditure Revenue Expenditure Expenditure Position Budget Budget Budget Budget Count 1  July 15, 2020 Budget Session Idaho Falls $79,597,801 $63,493,092 $86,371,598 $81,448,561 $1,850,760 2.32% 72 Power Director Prairie stated the budget for the previous 2-3 years has been heavy-capital based upon the prospect of construction for the Sugarmill to Paine Transmission Line. He stated he has a high degree of confidence the construction will occur this year. He noted the money for this project will be expended from IFP funds although Rocky Mountain Power (RMP), as a co-owner at 49%, will reimburse IFP for these expenses. He stated the IFP portion of the line will be under a transmission contract through the Idaho Energy Resources Authority which will also bring in revenue to replenish the capital reserves. Director Prairie requested the addition of two (2) positions. He noted additional positions are included in the Fiber budget. Ten-Year Review of Expenditure Categories – Director Prairie noted the Capital Outlay is budgeted expenses, not actual expenses. These budgeted expenses are for the Sugarmill to Paine transmission line and the Sugarmill Substation. Updated Department Budget Overview 2020/21 2020/21 2020/21 2019/20 2019/20 Proposed Proposed $ Change % Change Proposed Department Expenditure Revenue Expenditure Revenue Expenditure Expenditure Position Budget Budget Budget Budget Count Idaho Falls $79,597,801 $63,493,092 $86,371,598 $84,481,561 $4,883,760 6.14% 72 Power Director Prairie stated this updated budget has increased expenses from RMP for the cost of one (1) large buyout from recently-annexed properties. This cost was anticipated at approximately $3M dollar, RMP recently indicated revenue portion of the customer counts was approximately $2.7M, which was higher than anticipated. Therefore, this amount increased from $3M to $6M. Director Prairie believes it’s important to get customers connected to the IFP electric system. Brief comments followed. Director Prairie stated customers pay 50% of the revenue portion in rates (this is a separate surcharge). 2020/21 Highlights, Strategies and Goals  Sugarmill to Paine Transmission Line  Continued distribution automation  Underground aging electrical replacements  Continue energy efficient light-emitting diode (LED) streetlight conversions Mr. Boorman stated the LED lights have a 10-15 year lifespan. He also stated this conversion may take 3-4 years to complete and, power consumption will be cut in half.  Westside Substation Bonneville Power Administration (BPA) buyout (under negotiations)  Continued buyouts of recently annexed customers from RMP  Continue employee distancing, tiered hours, front office closed to general public walk-ins, and, enhanced sanitation practices Director Prairie noted $230,000 has been included in the budget for the Carbon-Free Power Project (CFPP). He will revise the budget as necessary per the project. He noted $370,000 is project-to-date. Fees include short-term suspension on non-remote disconnect fee; security lighting rate moved to a flat rate regardless of wattage; transfer customer revenue buyout surcharge; and, joint use on poles application charge. Idaho Falls Fiber – Department Structure: dark fiber leased pairs, and fiber to the home. Department Budget Overview 2020/21 2020/21 2020/21 2019/20 2019/20 Department – Proposed Proposed $ Change % Change Proposed Expenditure Revenue Parks/Zoo Expenditure Revenue Expenditure Expenditure Position Budget Budget Budget Budget Count 2  July 15, 2020 Budget Session Idaho Falls $8,446,501 $652,912 $6,243,639 $922,064 $-2,202,862 -26.1% 9 Fiber Director Prairie stated Fiber has been broken out into its own fund. Ten-Year Review of Expenditure Categories – there is no review due to the new/separated fund. 2020/21 Highlights, Strategies and Goals  Expansion of Fiber to home project  Marketing and communication of network  Continued expansion and maintenance of the dark fiber network  Continue employee distancing, tiered hours, and, enhanced sanitation practices Director Prairie believes these goals will occur over the course of three (3) years. Fees include backbone dark fiber pair lease and update fee resolution to reflect current lit network charges. Director Prairie wants to ensure ongoing costs keep up with inflation costs. Councilmember Radford believes IFP is on good financial ground, there are good principles of accounting, and, there is good re-investment in capital and transmission. He also believes the future at IFP is sustainable and productive. Mayor Casper noted the position counts are the baseline. Director Prairie stated positions must be approved by Council and are shifted around as needed. Brief comments followed regarding Full-time Employees (FTEs) and position counts. Councilmember Freeman is favorable of the fiber budget being separated from the IFP budget as he believes fiber costs should not affect the utility rates. Mayor Casper believes City Code wording may need to be changed to reflect the separation of power and fiber. Additional discussion on this wording will occur at a future IFP Board Meeting. Public Works – Director Fredericksen stated the budget presented is a 1% increase in the Enterprise Funds to meet the needs of the department. Director Fredericksen reviewed the following with general discussion throughout: Department Structure: Public Works Administration (includes GIS, Snow Removal and Engineering), Street Division, Water Division, Sanitation Division, Wastewater Division, and, several Special Capital Funds. Department Budget Overview 2020/21 2020/21 2020/21 2019/20 2019/20 Proposed Proposed $ Change % Change Proposed Department Expenditure Revenue Expenditure Revenue Expenditure Expenditure Position Budget Budget Budget Budget Count PW Admin. $- $- $- $- $- - 4 PW GIS - - - - - - 2 PW Snow 1,000,000 - 1,000,000 - - 0% - Removal PW 1,342,700 283,500 1,302,100 122,500 (40,600) -3% 14 Engineering Total $2,342,700 $283,500 $2,302,100 $122,500 $(40,600) -2% 20 Director Fredericksen stated Administration and GIS have no costs as these costs are distributed through the three (3) Enterprise Funds in the Street Division. He noted a savings account has been established for snow removal with the budgeted authority of $1M. He noted $320,000 was expended in the previous year for snow removal. Director Fredericksen stated Public Works has a total of 120 FTEs, there are no additional FTE requests. Department Budget Overview 3  July 15, 2020 Budget Session 2020/21 2020/21 2020/21 2019/20 2019/20 Department - Proposed Proposed $ Change % Change Proposed Expenditure Revenue Streets Expenditure Revenue Expenditure Expenditure Position Budget Budget Budget Budget Count Streets Admin. $2,628,877 $7,350,900 $2,594,850 $6,914,000 $(34,027) -1% 21 Signing/Pave 411,543 - 401,300 - (10,243) -2% 1 Mark Paved Street 3,550,600 - 3,537,100 - (13,500) 0% - Maintenance Snow & Ice 318,700 - 367,500 - 48,800 15% - Control Street Cleaning 390,100 - 356,100 - (34,000) -9% - Other Depart. 178,200 - 220,900 - 42,700 24% - Services Total $7,478,020 $7,350,900 $7,477,750 $6,914,000 $(270) 0% 22 Director Fredericksen stated the major expenditure is in paved street maintenance, including a $400,000 expenditure for the shared building with Sanitation. Department Budget Overview 2020/21 2020/21 2020/21 2019/20 2019/20 Department – Proposed Proposed $ Change % Change Proposed Expenditure Revenue CIP Funds Expenditure Revenue Expenditure Expenditure Position Budget Budget Budget Budget Count Sanitary Sewer $650,000 $320,000 $- $- $(650,000) -100% - Capital Municipal 1,200,000 791,600 1,000,000 770,000 (200,000) -17% - Capital Street Capital 2,000,000 1,530,000 1,800,000 615,000 (200,000) -10% - Bridge & 350,000 150,000 350,000 160,000 - 0% - Arterial Street Water Capital 1,200,000 530,000 - - (1,200,000) -100% - Surface 50,000 35,000 50,000 41,500 - 0% - Drainage Traffic Light 570,000 437,000 600,000 490,000 30,000 5% - Capital Total $6,020,000 $3,793,600 $3,800,000 $2,076,500 $(2,220,000) -37% - Director Fredericksen stated the majority of decrease is due to the Sanitary Sewer Capital and Water Capital being zeroed out and moved to the Water and Wastewater Funds. Street Capital is a hold-over for reimbursement from Federal Aid projects. Director Fredericksen noted developers are now being asked to build roadways as development occurs, rather than encumber the construction for a later date. This is protection for the City. Department Budget Overview 2020/21 2020/21 2020/21 2019/20 2019/20 Department - Proposed Proposed $ Change % Change Proposed Expenditure Revenue Water Expenditure Revenue Expenditure Expenditure Position Budget Budget Budget Budget Count Water Admin. $2,221,496 $10,088,000 $2,469,150 $10,466,500 $247,654 11% 2 Well O&M 3,721,635 - 3,259,100 - (462,535) -12% 4 Distribution 5,345,695 - 5,077,400 - (268,295) -5% 13 System O&M New 100,500 - 1,400,500 780,000 1,300,000 1294% - Construction Total $11,389,326 $10,088,000 $12,206,150 $11,246,500 $816,824 7% (-3%) 19 4  July 15, 2020 Budget Session Director Fredericksen stated this indicates a 7% increase if proposed expenditures are considered, however, if capital expenditures are referenced year by year there is a 3% decrease. He noted a number of major projects are anticipated, including water line replacement and total roadway reconstruction on 1st Street from Yellowstone Avenue to Lomax and, well work. Department Budget Overview 2020/21 2020/21 2020/21 2019/20 2019/20 Department – Proposed Proposed $ Change % Change Proposed Expenditure Revenue Sanitation Expenditure Revenue Expenditure Expenditure Position Budget Budget Budget Budget Count Sanitation $1,312,400 $4,654,000 $1,081,750 $4,704,000 $(230,650) -18% 3 Admin. Construction & 404,000 - 964,600 - 560,600 139% 2 Maintenance Collection 1,646,400 - 1,265,300 - (381,100) -23% 6 Container Collection 1,348,800 - 1,329,400 - (19,400) -1% 10 Handload Tilt Frame 945,900 - 1,124,600 - 178,700 19% 2 Container Total $5,657,500 $4,654,000 $5,765,650 $4,704,000 $108,150 2% 23 Director Fredericksen stated the majority of the increase in Construction and Maintenance is for the shared building. Department Budget Overview 2020/21 2020/21 2020/21 2019/20 2019/20 Department – Proposed Proposed $ Change % Change Proposed Expenditure Revenue Wastewater Expenditure Revenue Expenditure Expenditure Position Budget Budget Budget Budget Count Wastewater $2,827,158 $10,914,000 $2,757,950 $12,535,000 $(69,208) -2% 13 Admin. Collection 943,500 - 1,034,000 - 90,500 10% - O&M New 960,700 - 2,656,900 - 1,696,200 177% - Construction Storm Drain 902,700 - 728,600 - (174,100) -19% - O&M Treatment Plant 6,511,524 - 6,764,200 - 252,676 4% 23 Total $12,145,582 $10,914,000 $13,941,650 $12,535,000 $1,796,068 15% (8%) 36 Director Fredericksen stated this increase is similar to the Water Division. Two (2) major items in New Construction include a proposed joint project with the Iona Bonneville Sewer District (IBSD) (cost is based on percentage of flow) and Sunnyside Road trunk lining. Ten-year Review of Expenditure Categories - Director Fredericksen stated the spikes are the Capital Outlay projects. 2020/21 Highlights, Strategies and Goals  $1.1M share between Sanitation and Street Divisions  Fee increases  Purchase of vehicles  Continuation of the water tower and various wells  Evaluation of pilot programs for water metering (install 100 residential meters for this pilot program)  Construction-related projects in the Wastewater Division and dewatering  Better traffic movement within Idaho Falls  Renewed emphasis on good street maintenance 5  July 15, 2020 Budget Session Discussion followed regarding traffic issues, traffic counts, signalized intersections (Director Fredericksen stated traffic signalization tweaks can be made on a daily basis), long-range modeling for turn lanes, roadway widening at Crestwood Lane, Public Service Announcements (PSAs) for the roundabouts near Costco, identifying funding for infrastructure improvements, and, street maintenance costs associated with landscape watering. To the response of Councilmember Francis, Director Fredericksen stated three (3) High-Intensity Activated crossWalK (HAWK) projects are anticipated at 9th Street and Bower, 1st Street and Eastview, and, Broadway and Dale; and, Broadway projects are with the Idaho Transportation Department (ITD). Councilmember Francis requested additional discussion of Payment in Lieu of Taxes (PILOT). Fees include annexation fee increases, water fee increases and new fees, new sanitation fees to coincide with County fees, and, wastewater fee increases and new fees. Councilmember Freeman expressed his appreciation to Director Fredericksen and his staff. Community Development Services – Director Cramer reviewed the following with general discussion throughout: Department Structure: Building and Planning Divisions. Bonneville Metropolitan Planning Organization (BMPO) is housed under this department although there is no supervisory role. Funds managed by this department (other than General Fund Tax/permit revenues) include Community Development Block Grant (CDBG), CV-CDBG, and Environmental Protection Agency (EPA) Brownfields grant. Department Budget Overview 2020/21 2020/21 2020/21 2019/20 2019/20 Proposed Proposed $ Change % Change Proposed Department Expenditure Revenue Expenditure Revenue Expenditure Expenditure Position Budget Budget Budget Budget Count Administration $2,206,734 $1,301,400 $2,231,335 $1,838,700 $24,601 1% 17 BMPO 384,362 300,000 345,954 285,000 (38,408) (11%) 3 CDBG 503,740 400,000 877,810 750,000 374,070 43% 1 Program Total $3,094,836 $2,001,400 $3,455,099 $2,873,700 $360,263 10% 21 Director Cramer stated this department recently had shift in staffing with the addition of a position in the Building Division, an internal promotion left a vacant position, and, due to future budget concerns, a full-time clerk position was reduced to part-time. He noted during this shift, the position was inadvertently removed from the budget. Therefore, $45,000 should be added to the 2020/21 Proposed Expenditure Budget for Administration which also changes % Change Expenditure to 3%, Total from 10% to 13%, and Position Count to 21.5 or 22. Director Cramer stated there are three (3) main changes in the revenue structure for the budget. This includes the Coronavirus Aid, Relief, and Economic Security (CARES) Act funding (a $250,000 grant), EPA grant (this is the final year of that grant in the amount of $350,000), and, permit revenue. Director Cramer noted the CDBG projects were previously approved and there is effort to accelerate CDBG projects for COVID. He also noted, per discussion with Finance, the proposed revenue is based on actual trend versus prior budget trend. Director Cramer stated $85,000 in Administration will be funded by other sources. This will decrease the burden on the General Fund. Department Budget Overview 2020/21 2020/21 2020/21 2019/20 2019/20 Proposed Proposed $ Change % Change Proposed Department Expenditure Revenue Expenditure Revenue Expenditure Expenditure Position Budget Budget Budget Budget Count Business Improvement $85,000 $90,000 $85,000 $90,000 - - - District (BID) Director Cramer stated the BID request is dependent on actual taxes collected although the BID has a reserve fund for projects. 6  July 15, 2020 Budget Session Ten-Year Review of Expenditure Categories – Director Cramer stated the largest expenditure is salary and benefits although this is decreasing due to anticipated retirements (which are at the top end of step and grade) and reduction in force. He noted operating expenses increase in 2019 was due to BPA grants although this will drop unless an extension is required. 2020/21 Highlights, Strategies and Goals Priorities by division Building  Update e-TRAKiT software, maintain front counter and inspection staff, experiment with contract inspection staff Planning  Update Comprehensive/Strategic Plan (Director Cramer is hopeful to complete this before end of 2021), monitor efficiency of code enforcement, spend CDBG grants and update the 5-year consolidated plan Priorities Spend the grants Concerns All divisions – keeping up the pace Director Cramer reviewed Planning and Zoning (P&Z) application cumulative total (he noted more applications have been received this year than the previous three (3) years), permits applied Year-to-Date (YTD), permits issued YTD, and, fees collected. He stated this is relevant to the staffing level needs. Fee changes include the removal of a plan application for a zone that no longer exists. To the response of Councilmember Hally, Director Cramer believes tax revenue from the General Fund would be approximately 18%. Councilmember Radford expressed his appreciation for the direction of the department and the approach Director Cramer is taking for his staff. He believes the Council needs to be supportive of the upcoming Comprehensive Plan and Strategic Plan and the needed resources. Councilmember Smede expressed her appreciation for utilizing more revenue. She believes Director Cramer is a very humble director. She also believes this is an ambitious department and is adding value to the City. Councilmember Francis concurred with Councilmembers Radford and Smede comments. Mayor Casper believes the tax base is growing when this department is busy. She expressed her gratitude for the forecast of being busy. Brief comments followed regarding the e-TRAKiT system. To the response with Mayor Casper, Director Cramer stated a kick-off call recently occurred with Opticos Design who is interested in increasing the housing choices in the community. He stated he is excited for this project. He noted Opticos is included in the current budget although consulting costs will be included in the next fiscal year budget. Councilmember Dingman believes this department is able to pivot and knows how to react and get things done. She also believes this department has progressed so much under Director Cramer’s leadership. To response of Mayor Casper, Director Cramer believes the level of Code Enforcement would be dependent on Councils’ desires. He believes a full-time clerk is beneficial. Decision on Property Tax Relief: Mr. Hagedorn stated this program is constantly evolving and is still being legally challenged across the State. He indicated the City will proceed as if the program is moving forward. He also stated this program is designed for taxpayers, not cities. There is approximately $200M in COVID money that the State wants to provide to the taxpayer. This is considered pass-through money. Mr. Hagedorn reviewed the methodology for the cities stating this is based on a formula determined by the committee. This allocation is then based upon payroll of public safety. Mr. Hagedorn stated he is unsure if the Ambulance Fund is included in the calculation or if this fund is passed onto the County. He indicated there is more in public safety payroll taxes than could be passed along to taxpayers. The City allocation is approximately $4.2M as a maximum amount. A condition of this program would not allow a City to levy the statutory 3% increase however this amount could be pushed into foregone. The deadline for notification is July 17. Mr. Hagedorn stated payroll costs would be the standard rate plus benefits. This does not include hazard pay, overtime, or wages paid under another program. The estimated payroll from March through December would be approximately $16-17M, including ambulance. This is more than the allowable amount. Mr. Hagedorn stated the amount could 7  July 15, 2020 Budget Session increase if cities or counties opt out. Per the Association of Idaho Cities (AIC), the majority of counties and larger cities are opting in, the smaller cities are not although this changes daily. Mr. Hagedorn clarified the City would receive a reimbursement of 103%, which based on the $4.2M, would amount to a net increase of approximately $126,000. He reiterated the amount is unknown at this time although the maximum is $4.2M. He is also unsure how this amount was actually calculated. Mr. Hagedorn stated this amount has no effect on the tax base. The L2 (certification of property taxes) form is submitted which the State enters into an agreement to swap property taxes for CARES, the decrease is included on the tax statement. Mr. Hagedorn stated there is a disadvantage to the program – the taxpayers gets a small decrease this year although the amount is increased next year. The increase would be in addition to any levy increase next year. Mr. Hagedorn would prefer a stimulus check versus this program. He stated there would be no savings if the valuation increases, which he expects to occur. Councilmember Francis expressed his frustration as he believes this limits options for budgeting. He questioned any effect for bonding for a Law Enforcement Building. Mr. Hagedorn stated this would have no effect. Mayor Casper stated the actual money is determined by July 24, she believes the City could opt out at that time. Councilmember Dingman believes, philosophically, citizens would choose budgeted items over a tax relief. She also believes citizens want more services, programs, and, benefits in the City. She is in favor of a Law Enforcement Complex. Councilmember Hally believes this is a lose-lose situation. Councilmember Freeman believes this is a short-term benefit with long-range implications. Mayor Casper believes this represents poor financial planning. She struggles how to communicate this to the community. Councilmember Francis believes relief should be given directly to the individuals, this should not limit City governments. He does not believe this is good policy by the State. To the response of Councilmember Radford, Mayor Casper clarified the City would be able to manage the budgeting process as other years’ if the City does not participate in this program. Councilmember Radford is not supportive of raising taxes in a pandemic. He does not believe there is a downside to this program. Councilmember Dingman believes it’s disingenuous to save $7 a month for property tax relief. She stated she does not want the choice to be taken away. Councilmember Radford indicated the mall would receive approximately $40,000 in tax relief. He believes this option should be kept open as the County will have numbers as well. Mayor Casper clarified this amount is based on the salaries although the City will still be paying those salaries. She also stated there will be no reimbursement/money to the City, this is a relief to taxpayers. Councilmember Radford cannot imagine the City would not sign on. Mayor Casper stated services could be decreased by this small amount to the taxpayers. Councilmember Dingman wants to keep the options open to meet the service needs that the community has asked for. To the response of Councilmember Smede, Mr. Hagedorn stated these amounts are after the homeowners exemptions. He reiterated this would swap property tax money for CARES money, it would not be accurate to say this is paying the costs of first responders. He also clarified only those entities with public safety can take the savings. He believes the County share would be less than the City share and, counties can submit ambulance costs. Councilmember Smede believes this is condescending to the citizens. She believes the City should opt in on the first round and further decide from the final numbers. Mayor Casper reviewed budget requests totaling $1M. Mr. Hagedorn clarified the certification date is August 1. He also stated property tax information has not been received from the County, he believes the deadline was July 1. Councilmember Dingman believes the failure of the deadline is an ongoing problem and is detrimental to this conversation. Following additional brief comments, there was consensus of the Council to opt in based on the condition that this is not a binding decision. Per Mayor Casper’s request, staff will attempt to reach out to the State to determine the option to change/opt out at a later date no later than August 1. Mayor Casper indicated additional discussion may need to occur. Follow-up Discussion: Mayor Casper announced Walmart and Sam’s Club will be requiring mask wearing of customers in the coming week. She believes mask wearing will allow businesses to stay open and will allow schools to open in the fall. Councilmember Smede stated businesses are being mis-treated by those who fail to wear a mask. There being no further business, the meeting adjourned at 12:09 p.m. s/ Kathy Hampton s/ Rebecca L. Noah Casper CITY CLERK MAYOR 8