City Council

February 20, 2024 Council Work Session The City Council of the City of Idaho Falls met in Council Work Session, Tuesday, February 20, 2024, in the Council Chambers in the City Annex Building located at 680 Park Avenue in Idaho Falls at 3:00 p.m. Call to Order and Roll Call There were present: Mayor Rebecca L. Noah Casper Council President Lisa Burtenshaw Councilor John Radford Councilor Michelle Ziel-Dingman Councilor Jim Freeman Councilor Jim Francis Councilor Kirk Larsen Also present: Ian Turner, AirPort Director Pam Alexander, Municipal Services Director Mark Hagedorn, Finance Manager / Treasurer John Marley, Police Captain Bryce Johnson, Police Chief Chris Fredericksen, Public Works Director David Richards, Water Superintendent Eric Grossarth, Public Information Officer Darin Jones, Human Resources Director Michael Kirkham, City Attorney Corrin Wilde, City Clerk Mayor Casper called the meeting to order at 3:01 P.M. with the following items: Public Works- Discussion Lead and Copper Rule: Public Works Director Chris Fredericksen and Water Superintendent David Richards lead a discussion about the Lead and Copper Rule. Director Fredericksen provided an overview of this rule, which was established by the EPA in 1991, and sets lead and copper limits at 15 parts per billion and 13 parts per million respectively. He detailed Idaho Falls’ transition from galvanized to copper pipes in 1978, a move made to comply with these limits. Director Fredericksen also outlined the city’s upcoming obligations, which include the creation of a water service line inventory. This inventory, which will identify the materials used in both city and customer-owned lines, is due to be submitted to the DEQ by October 2024. The process of compiling this inventory involves a thorough review of work orders and inspection reports, which will provide information on an estimated 97% of city lines and 82% of customer lines. Director Fredericksen reassured the Council that testing of Idaho Falls’ water system has consistently shown no lead issues, with results always falling below EPA limits. He highlighted that their consumer confidence report, which details water quality, is readily available online. Despite the absence of lead or copper issues in Idaho Falls’ water system, he stressed the importance of completing the inventory to meet requirements. Director Fredericksen also touched on the federal government’s 1986 prohibition of lead in all water lines and fixtures beyond a certain percentage. He noted that any service lines prior to 1979, when the city changed its water standards, would be a primary concern. Councilor Radford queried how the City arrived at the standard of 15 parts per billion for lead and 13 parts per million for copper in drinking water. Director Fredericksen clarified 1  February 20, 2024 Council Work Session that 15 parts per billion is the actionable level, and any reading above this would trigger public notification and immediate action, such as the implementation of a filter to remove lead from the drinking water. He also mentioned emerging technology to replace lead service lines but cautioned that smaller lines may be difficult to access and soldered lead may be present. Mayor Casper inquired about the Public Outreach Plan under review, expressing curiosity about the nature of the planned outreach. Director Fredericksen shared that he has been collaborating with the City’s public information officer to determine the most effective communication method with the public. Once finalized, the plan will be shared with the Mayor’s office and distributed to all of Council. Director Fredericksen emphasized that while they don’t believe there is a problem with their system, they are working towards meeting a national requirement, which is the message they aim to communicate. Mayor Casper sought clarification on the state deadline of October 16, asking if it was part of the action to meet a federal deadline set by the EPA (Environmental Protection Agency). Director Fredericksen confirmed that this deadline applies nationwide. Police Department and Municipal Services- Fleet Vehicle Leasing Program: Director Pam Alexander and Captain John Marley presented the Resolution for the Fleet Vehicle Leasing. Director Alexander provided context for this agenda item, noting that a fleet replacement program presentation was given on September 11, 2023 and an RFP was issued and awarded on January 11th, 2024 to United Fleet Services. However, Director Alexander realized she neglected to include authorizing the execution of necessary documents in her memo. The bank working with United Fleet Services now requires a resolution to formally authorize who can execute documents. Director Alexander explained the resolution presented includes reiteration of what was approved by Council on January 11th, including the not to exceed amount of $1.5 million. It also states the multi-year RFP was approved on that date and authorizes additional actions by the Mayor and staff. Director Alexander requested the resolution be executed that day to avoid further delay in receiving vehicles, as some have been sold already during the wait. Captain John Marley and Mayor Casper provided additional context. It was moved by Councilor Freeman, seconded by Councilor Burtenshaw, to adopt the Resolution and Authorize the Execution of a Lease Purchase agreement and Authorize the Mayor and City Clerk to execute the necessary documents. The motion was carried by the following vote: Aye – Councilors Larsen, Francis, Dingman, Burtenshaw, Freeman. Nay – Councilor Radford. RESOLUTION 2024-04 A RESOLUTION OF THE CITY OF IDAHO FALLS, IDAHO, A MUNICIPAL CORPORATION OF THE STATE OF IDAHO, AUTHORJZING THE EXECUTION OF A LEASE-PURCHASE AGREEMENT WITH RESPECT TO THE ACQUISITION AND LEASING OF CERTAIN EQUIPMENT FOR THE IDAHO FALLS POLICE DEPARTMENT WITHIN THE TERMS PROVIDED HEREIN; AUTHORJZING THE EXECUTION AND DELIVERY OF DOCUMENTS REQUIRED IN CONNECTION THEREWITH; AND AUTHORJZING THE TAKING OF ALL OTHER ACTIONS NECESSARY TO THE CONSUMMATION OF THE TRANSACTIONS APPROVED BY THE COUNCIL ON JANUARY 11, 2024, AND PROVIDING THAT THIS RESOLUTION BE EFFECTIVE UPON ITS PASSAGE, APPROVAL, AND PUBLICATION ACCORDING TO LAW. Municipal Services- Quarter Financial Report: Pam Alexander and Mark Hagedorn provided a quarterly financial report to the Council. Mr. Hagedorn discussed three main topics: cash investments, budget to actual, an update on the Treasury report, and some final comments. The focus was first on cash investments. As of December 2023, the investments were broken down by time, indicating when funds would return to the city after investing. However, there was a slight deviation from the investment policy. The policy states that 25% can be invested beyond two years, but they had 29% invested beyond that period. This was due to two reasons: 2  February 20, 2024 Council Work Session • A change in investment philosophy: Previously, some funds were managed by a broker, but this is no longer the case. When these funds were taken back, some were beyond the policy limit. Instead of selling them, which could result in a loss, they decided to hold onto them. • Capital projects: Due to these projects, they haven’t been able to reinvest as much as in the past. This has also affected the cash flow, limiting investments to twice a year, in January and July. The current investments are structured in a way to cover current expenditures. This strategy has been affected by capital money going out, resulting in less money available for long-term investments (beyond two years). In the past, they would have about 5 million till the end for two years, but this has changed due to the capital projects. Ms. Alexander and Mr. Hagedorn discussed a change in percentage from 29% to 25%. This change had been reviewed with the Investment Finance Committee and was related to a master agreement. Councilor Burtenshaw raised a question about changing the internal policy, suggesting a new percentage of 30%. Mr. Hagedorn mentioned that he brought up this issue with the Investment Committee and the response was let’s wait and see. Councilor Francis asked when they should be concerned about the percentage number. Mr. Hagedorn responded that the concern arises when the treasurer is investing cash far into the future and is unable to meet weekly claims. This is not necessarily an issue, but he thinks at about 30%. Ms. Alexander highlighted the ongoing communication with large infrastructure departments like Idaho Falls Power and Fiber, and Public Works. She emphasized the importance of understanding their capital project lifespan before making investment decisions. Mr. Hagedorn and the Council discussed managing finances for various projects, ensuring sufficient liquidity, and making prudent investment decisions. The goal is to meet all payment obligations without having to resort to selling investments. The Investment Committee plays a crucial role in advising on these matters. They emphasized the strategy of spreading out payments for various projects, including a water tower, over weekly or monthly intervals. The goal is to maintain sufficient cash reserves to cover these payments without resorting to selling investments. The conversation then shifted to investment returns, with an expectation of significant short-term returns due to current market conditions. However, the focus remained on aligning these returns with the budget allocated for the water tower project. The investment policy was also discussed, highlighting a change made last December to ensure the availability of sufficient liquid cash, which is used incrementally to meet weekly payment needs. The fluctuating cash flow, ranging between 150 and 200 with a peak at about 175, was also addressed, with the aim of effectively managing it to meet payment obligations. The role of the Investment Committee was clarified as being advisory, providing feedback on investment decisions but without explicit authority. In case of risky investments, the committee is consulted for advice. Risk management measures were also discussed, particularly the strategy of swapping investments in financial institutions downgraded to a triple B rating for those with a triple A rating to avoid potential defaults. They touched on the use of market analysis obtained from advisors to inform investment decisions. The group acknowledged the need for a robust investment finance plan to address communication gaps, particularly in larger departments like Power and Public Works. The integration of analytics systems has improved reporting capabilities, allowing for a comprehensive inventory of investments and compliance with external audit concerns. The advisory committee, which includes the state treasurer, plays a role in this process. 3  February 20, 2024 Council Work Session They also touched on the financial management of the Airport, which handles significant incoming and outgoing funds. However, the focus remains on departments like Power that use their cash balance rather than a revenue stream. The timing between payments and receipts is a key concern, particularly for projects like the peaking plant. The goal is to minimize the time between bond drawdowns and expenses to reduce the need to carry a balance. This approach reflects a strategic and cautious approach to financial management within the city. Mr. Hagedorn highlighted the importance of diversification and risk management, with a shift towards more CDs, treasuries, and agencies due to their lower risk compared to traditional bonds. CDs below $250,000 are backed by the U.S. government, providing an additional layer of security. Mr. Hagedorn highlighted that our previous investment strategy involved a 50% risk in bonds. However, we’re currently not reinvesting in bonds. Instead, we aim to diversify and equalize our portfolio. The banking sector is under significant pressure right now. Radford raised the question of whether state regulations limit our investment choices, particularly in market-based securities. Mr. Hagedorn explained that Idaho maintains a conservative investment approach due to the stability of treasuries, agencies, and bonds compared to the volatile marketplace. A few years ago, cities faced bankruptcy issues with pension plans because they invested in market- based securities, such as equity securities, rather than bonds. They discussed cash flow and investment strategies. The cash flow typically increases around December due to investments, with occasional jumps often tied to the completion of construction projects. Mr. Hagedorn says there are two types of cash - debit cash and investment cash, with the latter kept in highly liquid accounts for easy access. Investments have been shifted to Wells Fargo for safety, and local investments are insured to cover risks. The breakdown of investment earnings by department, contributing to a pool determined by the average balance for the month. The cash flow is generally predictable and always increasing, with variations due to capital projects funded by grants or bonds. We do not receive cash flow consistently, leading to fluctuations in the cash balance and a cautious approach towards general fund revenues. The numbers discussed represent ending cash balances, not inflows or outflows. Cash and Investments: BROKER AMOUNT % LGIP $ 991,848.06 0.66% Wells Fargo $ 139,961,260.74 93.13% Bank of Commerce $ 1,543,778.25 1.03% Westmark CU $ 1,015,301.84 0.68% Idaho Central CU $ 4,693,219.35 3.12% Frontier CU $ 2,084,851.68 1.39% Total $ 150,290,259.92 100.00% They discussed cash balances, particularly in enterprise funds such as the airport, power, and public works. The state has expressed concern about these balances and has asked for clarification on their intended use. The City has categorized its cash into different types, with future capital being the default category. Significant changes were noted in the reporting of funds, with a shift from individual funds to a pooled approach. This change, along with the receipt of the first installment of ARPA funds, led to an increase in the general fund from 1.8 million at the end of December 2020 to 11 million. 4  February 20, 2024 Council Work Session Cash & Investments by Fund: Month Ending, December 31 2019 2020 2021 2022 2023 General Fund $ 407,127 $ 1,892,278 $ 11,428,612 $ 16,671,541 $ 17,889,445 Special Revenue Funds 28,618,866 18,518,387 25,981,069 21,469,973 28,439,466 Impact Fees Funds - - - 400,386 3,399,215 Capital Project Funds 8,169,579 6,064,087 2,630,831 4,861,540 3,493,860 Enterprise Funds 72,750,831 96,614,065 82,137,348 109,207,131 105,263,386 Total $ 109,946,403 $ 123,088,817 $ 122,177,860 $ 152,610,572 $ 158,485,370 The city-wide revenue for the first quarter was 52 million, against a budgeted 76 million. While this is typical for the first quarter, there were concerns about the lower-than-expected revenue in the general fund. A large impact fee payment received this year was also noted. There was discussion about changes in accounting standards for investment income, shifting from cost basis to fair market value. This value, influenced by interest rates, fluctuates monthly. The investments, primarily in bonds, are affected by these fluctuations. Investment rates dropped between October and December due to speculation about Federal rate reductions. This led to bonds selling at a lower interest rate and showcased the investments, which were higher than the marketplace. Budget to Actual City-Wide Revenue: Revenue 2023-2024 First Quarter Percentage Budget October -December Received Taxes and Franchises $ 52,438,088 $ 683,825 1.30% Intergovernmental Revenue 65,900,826 9,904,388 15.03% Gov't Charges for Services 13,366,317 3,121,460 23.35% Enterprise Charges for Services 113,861,984 28,688,945 25.20% Permits and Fees 1,351,655 598,628 44.29% Impact Fees 3,225,353 1,591,113 49.33% Interest Revenue 3,036,250 3,740,992 123.21% Contributions 5,155,000 64,010 1.24% Miscellaneous 3,568,353 2,208,599 61.89% Other Financing sources 14,632,000 1,822,723 12.46% Total Revenues $ 276,535,826 $ 52,424,683 18.96% The report shows 3.7 million in investment gains, but this figure represents the report’s shown value, not the realized value if all investments were sold. The discussion also touched on revenue sources, including conversions, and donations. City-wide expenditures were discussed, with a focus on wages. Due to the 26 pay periods in a year, wages are not evenly distributed throughout the year. The operating revenues were in line with expectations. 5  February 20, 2024 Council Work Session Budget to actual City-Wide Expenditures: Expenditures 2023-2024 2023-2024 First Quarter Percentage Budget Original Budget Revised Expended Wage/Benefits $ 91,550,896 91,550,896 18,850,503 20.6% Operating Expenses 120,216,690 120,466,122 22,178,798 18.4% Capital Outlay 102,199,960 103,597,119 10,089,645 9.7% MERF Allocation 8,797,999 9,637,850 2,326,814 24.1% Debt Service Payments 3,250,000 3,250,000 1,314,336 40.4% Transfers (15,572,683) (16,503,260) (3,306,875) 20.0% Miscellaneous 29,040,682 27,484,817 1,800,711 6.6% Total Expenditures $ 339,483,544 $ 339,483,544 $ 53,253,932 15.7% Ms. Alexander discussed that the progress of our projects is not linear, but we are not off-target. With the arrival of spring, there will be a surge in seasonal workers to assist with park maintenance, leading to an increase in wages and benefits during this period. As the weather improves, we anticipate an increase in capital outlay as we commence construction and other capital projects. The Equipment Replacement Fund (MERF) is currently under 25%, however, we have started receiving bids for replacing certain vehicles or equipment. We have been successful in procuring a number of replacements, with deliveries starting as early as October. Despite the fund being almost fully allocated, it remains in a healthy position. We continue to replenish our equipment, ensuring its readiness and efficiency. Mr. Hagedorn indicated that during the recent review, they implemented changes to the MERF (Municipal Equipment Replacement Fund) to increase transparency. These adjustments are a response to various factors, including new grants received, corrections to budgetary errors, and updates to General Ledger (GL) accounts. These changes are also reflected in the treasury report. Concerns were raised about the high volume of transactions affecting the budget, prompting a commitment to more transparent reporting of these changes as they occur. Mr. Hagedorn discussed the $3.25 million debt service payments, it was clarified that this figure represents actual payments for law enforcement services, including violence charges and personal book leases, rather than traditional debt service. We currently have three substantial debts: bonds for the police station and the North Loop, and the Phase One wastewater treatment project. All debts are being managed according to schedule, with an early termination clause preventing payoff earlier than ten years. The interest rate for these bonds is fixed for a 19-year period, with the option to pay more after ten years if financially advantageous. The favorable interest rates were achieved due to substantial cash reserves and market timing. This rate is notably lower than what other municipalities have managed to secure. Legislative Impacts: Potential state legislation could alter municipal debt management by mandating the use of cash reserves for debt repayment, representing a significant policy change. General Fund Status: Revenues and expenditures are on target, with a $115,000 increase due to unexpected grants, leading to contingency fund usage. These grants are mostly reimbursable post-expenditure. It was also discussed that grants often become available after the budget is set, leading to unanticipated funding opportunities. Departments are encouraged to budget conservatively, as they are held accountable for expenditures even if grant funding is not guaranteed. 6  February 20, 2024 Council Work Session Budget to Actual General Fund Expenditures: Expenditures 2023-2024 2022-2023 First Quarter Percentage Budget Original Budget Revised Expended Wage/Benefits $ 51,483,306 $ 51,413,306 $ 11,025,306 21.4% Operating Expenses 27,593,052 26,834,860 4,758,943 17.7% Capital Outlay 771,500 1,671,500 30,196 1.8% MERF Allocation 5,194,296 5,284,147 1,382,824 26.2% Debt Service Payments 2,000,000 2,000,000 - 0.0% Misc Expense 521,158 1,405,158 163,448 11.6% Transfers (15,122,683) (16,053,260) (3,150,380) 19.6% Total Expenditures $ 72,440,629 $ 72,555,711 $ 14,210,337 19.6% Budget to Actual General Fund Revenue: Revenue 2023-2024 First Quarter Percentage Budget October -December Received Taxes and Franchises $ 35,703,246 $ 468,372 1.31% Intergovernmental Revenue 25,741,010 5,541,088 21.53% Gov't Charges for Services 3,214,948 466,153 14.50% Permits and Fees 1,336,655 594,628 44.49% Interest Revenue 620,000 439,691 70.92% Contributions 2,721,500 38,023 1.40% Miscellaneous 493,100 78,126 15.84% Other Financing sources - 646,031 - Total Revenues $ 69,830,459 $ 8,272,112 11.85% Capital outlay has increased, due to unexpected operational needs, with significant purchases reported to the Council. Spending patterns are subject to change based on various factors, impacting general fund consistency. Director Alexander clarified the process for fleet replacements and additions, noting that planned replacements come to the Council on consent as they are budgeted and lifecycle managed. Additions, even if budgeted, are presented separately on the regular agenda to distinguish between replacements and new acquisitions. A resolution from 2018 outlines the process for notifying the Council about these expenditures. Financial Overview: The focus was on departmental revenues and expenditures. The airport showed a positive revenue balance, and large construction projects are set to resume in summer, impacting future reports. Mr. Hagedorn emphasized a zero-based budget for the general fund, with expenditure cuts considered if revenues are insufficient. 7.5 million is bond drawdowns. The Parks and Rec and Police departments’ budgets were reviewed, with the latter’s bond funds at estimated $7 million left. Enterprise funds are stable, and non- departmental sources like property taxes and state share revenue, especially from liquor sales, significantly affect the general fund. 7  February 20, 2024 Council Work Session By Department: Departments Revenue Budget First Quarter % of Budget Expenditure Budget First Quarter % of Budget Airport 29,553,279 3,435,498 11.62% 25,684,929 2,944,679 11.46% Community Development 3,465,250 842,273 24.31% 4,707,674 834,707 17.73% Fire 14,982,194 3,163,133 21.11% 28,328,937 6,093,655 21.51% Human Resources - - 0.00% 453,308 65,451 14.44% Legal 210,600 43,197 20.51% 533,569 95,446 17.89% Internal Service 3,180,000 1,353,662 42.57% 5,988,481 817,761 13.66% Library 3,178,645 175,735 5.53% 4,115,784 614,196 14.92% Mayor & Council 188,500 68,361 36.27% 765,309 118,669 15.51% Municipal Services 1,868,490 154,767 8.28% 7,203,032 1,432,732 19.89% Parks & Recreation 14,807,430 1,585,809 10.71% 26,017,258 3,703,472 14.23% Police 9,423,410 440,540 4.67% 30,641,997 6,518,391 21.27% Idaho Falls Power 90,935,800 21,381,677 23.51% 101,916,447 20,122,268 19.74% Public Works 52,675,063 14,746,456 28.00% 81,678,626 9,892,503 12.11% Non Departmental 52,067,165 5,033,574 9.67% 21,448,193 - 0.00% Total 276,535,826 52,424,682 18.96% 339,483,544 53,253,930 15.69% For the first quarter, there are no major financial concerns; however, potential issues to be addressed in the next quarter were acknowledged. The non-departmental revenue budget is set at $52 million, with a corresponding expenditure budget that is typically not spent, serving as contingency funds. The year began with approximately $24 million in contingency funds, which are intended to cover rollovers for ongoing projects from the previous year. The goal is to reduce this to around $15 million, providing a financial cushion to avoid reopening the budget mid-year. Mr. Hagedorn clarified that any surplus at the end of the year, after budget truing, remains in contingency and is not available for discretionary spending. It is allocated through the budget process, and no department is responsible for generating the revenue line. For instance, property taxes are not assigned to specific departments but are used to offset the general fund budget, ensuring there is no surplus revenue in non-departmental accounts. The council is generally aware of and approves these financial practices. Director Alexander emphasized the importance of the budget’s capacity to address unforeseen expenses. Mr. Hagedorn clarified that 70-75% of the general fund’s revenue is non-departmental, while only 15-25% is generated internally. Property taxes and state-shared revenues are not assigned to specific departments, allowing the council to control their allocation. Councilor Radford highlighted the need to understand the percentage of property tax usage by each department, noting that police, fire, and parks are the primary recipients. Councilor Francis inquired about the automatic distribution of a 3% increase across departments, which was confirmed to no longer be the practice. Instead, the Council approves allocations annually. Director Alexander referred to a worksheet used at the budget kickoff to outline these calculations, including statutory entries for libraries and the fire station repayment. The discussion concluded with an explanation that surplus general fund revenues are transferred to a future capital replacement fund, serving as a placeholder for projects like the fire station. Mr. Hagedorn mentioned that this practice started four years ago, with the largest amount transferred being approximately $2.5 million over three years. The Council is informed of these transfers each quarter. Mr. Hagedorn discussed the budgeting differences between federal, state, and local governments, emphasizing that local budgets are tools for predictability. Council President Burtenshaw stated that she and Councilor Francis noted the apparent similarity between the Parks and Police budgets, which is misleading due to the inclusion of Community Oriented Policing (COP) funds in the Police budget and the Parks and Recreation fees. Mr. Hagedorn 8  February 20, 2024 Council Work Session explained that Parks has multiple revenue sources, including capital improvement funds from donations and contributions, making direct comparisons challenging. Mr. Hagedorn also mentioned that the Parks and Recreation Department, with its various sub-departments like golf and capital improvements, has a project-based budget of approximately $26 million, which is not solely operational. The Police budget also includes capital expenditures. The discussion then shifted to financial reporting requirements under Title 50, which mandates the reporting of financial conditions without specific definitions, leading to variations across different cities. Mr. Hagedorn acknowledged past difficulties in making financial reports accessible and understandable to non-specialists. He is collaborating with Eric from the Mayor’s office to improve the readability of these reports, aligning with the Governmental Accounting Standards Board’s efforts to make financials more comprehensible to the general public. The goal is to present financial information in a clear and understandable manner for all. Mr. Hagedorn discussed the ongoing efforts to improve financial transparency and reporting. He explained that the City is presenting bank balances and cash by funds, along with a summary of adjustments. The report includes a detailed listing of bank transactions, with $61 million in deposits and $70 million in withdrawals for December, noting that these figures include transfers which count as both. He emphasized the importance of formal bank reconciliations, a practice not done in the past, which is crucial for accuracy. The reconciliation process accounts for the difference between the bank balance and book balance, which was approximately $8 million in process. The Treasurer’s Report focuses on the City bank accounts’ status as of December 31, 2023. The report may differ from the general ledger due to the timing of check clearances and deposit recognitions, as the ledger follows accrual accounting. Mr. Hagedorn highlighted the focus on the cash balance of each fund, especially those with negative balances. The city is addressing funds that have been negative for over three years. Regarding the Golf department, it was noted that it operates differently, often showing a positive balance at certain times of the year. The department’s financial status is not typically brought to the Council’s attention because it is self-sustaining and considered a quality-of-life aspect, unlike traditional enterprise funds, it is regarded for its contribution to the community’s quality of life. The Council has not sought any alterations to this operational model. Mr. Hagedorn advocates for financial transparency, ensuring information is accessible and comprehensible to all stakeholders. Councilor Larsen inquired about the process of determining specific financial numbers, to which Mr. Hagedorn responded that the details of over 500 transactions are summarized in the Trends Report’s back page. This allows Council members to see budget changes without overwhelming detail. He also mentioned the possibility of including accounting adjustments in future reports. Mayor Casper emphasized the importance of using established systems for financial inquiries, such as quarterly meetings and the liaison system, to ensure comprehensive understanding and effective communication among Council members. She encouraged Council members to bring their questions to these platforms for a collective learning experience rather than seeking individual data sets. Mr. Hagedorn concluded by stating that the financial statements are being finalized and will be ready for review soon, with the final version expected in April. He noted that audits typically reveal findings each year, as it is unusual for an audit to report no changes year over year. The discussion highlighted the ongoing efforts to enhance financial reporting and transparency within the Council. Mr. Hagedorn informed the Council about the state property tax relief bill’s impact on the City’s revenue stream. The state has paid a portion of the property tax bills, amounting to approximately $3-4 million, which the City has 9  February 20, 2024 Council Work Session yet to receive. This payment is part of the “circuit breaker” program, which provides property tax relief and is not a one-time occurrence; however, the increased eligibility for this relief is ongoing. The timing and amount of these payments are uncertain, as they depend on the state’s disbursement to the County and then to the City. Councilor Freeman clarified that this is not a one-time payment, and Councilor Larsen noted that a new bill would need to be passed each year for it to continue. Burtenshaw added that the allocation was for one year only, during COVID, and any budget increase would require a new bill. Mr. Hagedorn also discussed the City’s efforts to increase transparency in line with state goals. A new phase of the City’s website will make financial data available quarterly, allowing citizens to review expenditures in various categories. This initiative aligns with legislation requiring all government levels to provide accessible financial information to the public. The City is working to integrate its financial categories with those used by the state to ensure consistency and clarity. Director Alexander and Mr. Hagedorn discussed the City’s compliance with new legislation requiring all government entities to provide transparent financial information to citizens. They highlighted the integration of different financial categories to align with state standards and the City’s proactive approach in volunteering to test these systems to shape their development. Mayor Casper mentioned the use of homegrown designs for financial reporting, indicating a hands-on approach to ensure clarity for those reviewing the City’s finances. Despite the time it has taken, the goal is to make financial data more accessible and understandable. Mr. Hagedorn expressed confidence in the City’s financial condition, noting that external auditors and others have been impressed with the City’s financial planning and resources. Ms. Alexander added that the City has received high marks for transparency, thanks to a robust public records request system and an open approach to financial information. Councilor Radford reflected on the improvements in the general fund over the past year and a half, indicating a positive shift in financial management. He also mentioned the encouraging signs of accurate cost reporting around employee compensation and the overall financial growth of the City. The conversation underscored the City’s commitment to financial transparency and responsible management. City Attorney’s Office: Mayor Grant Authorization Resolution: On November 22, 2022, the Council passed Resolution 2022-34, which authorized the Mayor to accept donations, bequests, and gifts on behalf of the City. The proposed resolution would expand that authority to include accepting grant awards on behalf of the City and require the Mayor to provide a report of any grant awards, cash, stocks, bonds, or other securities that are accepted by the Mayor pursuant to the authority granted by the Resolution within thirty (30) days to the Council. City Attorney Micheal Kirkham presented a Resolution in response to a discussion at the previous February 5th Work Session. The two major changes in this resolution and the difference with what we currently have is that in the proposed resolution introduced two significant changes. Firstly, it would broaden the Mayor’s authority to accept a wider range of grants and gifts without prior Council approval, provided they are reported later. Secondly, it would mandate the Mayor to submit a report to the Council of any grants or gifts accepted under this authority within a specified timeframe. The Council members engaged in a discussion about the extent of the Mayor’s authority to accept certain grants and gifts without prior Council approval. The debate centered around the types of grants and gifts that should 10  February 20, 2024 Council Work Session require reporting to the Council. Some members advocated for transparency and wished to be informed of all items, while others were more interested in larger amounts. They also discussed the potential need to revise terms such as “restricted”, “including”, and the reporting timeline. However, no consensus was reached, and the draft resolution was pulled from the upcoming agenda to allow for further discussion. The Mayor agreed to work out the specifics for accepting FAA grants. As it stands, further discussion on the grant acceptance authority for the Mayor will be necessary. Acceptance and/or Receipt of Minutes: It was moved by Councilor Larsen, seconded by Councilor Radford, that Council receive the recommendations from the February 6, 2024, meeting of the Planning and Zoning (P&Z) Commission pursuant to the Local Land Use Planning Act (LLUPA). The motion carried with the following vote: Aye – Councilors Francis, Dingman, Freeman, Larsen, Radford, Burtenshaw. Nay – none. Mayor and Council: Calendars, Announcements, Events, Reports, Updates, Concerns, Questions, and Discussion: The Mayor announced tentative dates for the Sister Cities visit to Tokai from Idaho Falls, scheduled for October 30th through November 7th. Currently, there are 18 delegates with some slots reserved for the City. Those interested in joining are encouraged to plan within the next few weeks. The Association of Idaho Cities (AIC) is inviting proposals for workshops at the June conference, due by April 10th. The Mayor expressed her intention to suggest workshops that would be beneficial to us. In legislative updates, the Mayor highlighted the ongoing Urban Renewal Reform. Although it has not yet been assigned a number, Catherine Smith is diligently working with the Idaho Falls Redevelopment Agency to create a one-page summary for legislators. Committee Chair, Barb Ehart, is seeking more information on urban renewal. However, the proposed language for the reform is concerning as it introduces a tool that could be difficult to use, requiring a two-thirds vote and unanimous agreement from all participating properties. Senate Bill 1293 presents significant challenges. It impacts past annexations aimed at eliminating enclaves, making them more difficult to address. Under this bill, a high voting threshold and unanimous agreement would be required for annexation, allowing any single property owner to veto the process. Additionally, the bill restricts the use of Category B annexation to enclaved properties rather than adjacent ones. Councilor Freeman highlighted that implied consent, such as using city utilities, would no longer apply once properties become contiguous. The Mayor expressed concern about the bill’s unfriendly stance toward cities. Currently, it is pending in the Senate, where amendments can be made. Councilor Freeman raised the question about whether there have been complaints related to the way cities have been annexing. Mayor Casper encouraged Council members to look at House bill 506 short term rentals. This bill is looking to make significant changes to the short-term rental bill, making it less restrictive. Announcements: • Council President Burtenshaw discussed the exercise that Council members will work on before coming together for the upcoming budget priorities meeting. Council members will list a maximum of three budget priorities for each department. Council members will not consider the cost of the priority and how it will be achieved and specific personnel will not be mentioned in their discussions. • Councilor Freeman wanted to remind people that Idaho Falls Power is offering over $5,000 in scholarships for eligible high school sophomores and juniors in the Idaho Falls area. If you’re selected, they will receive a $500 scholarship and an all-expenses-paid trip to the Idaho Community-Owned Utilities Association (ICUA) Youth Rally at Northwest Nazarene University in Nampa. The application deadline is April 15th. Ten scholarships will be awarded in total. • Councilor Radford had not items to report 11  February 20, 2024 Council Work Session • Councilor Dingman had not items to report • Councilor Francis had no items to report. • Councilor Larsen gave updates on Public Works construction projects. The bid award for the Meppen Canal pedestrian highway beacon opens on Thursday. The Pancheri bridge rehabilitation is out for Bid. There being no further business, the meeting adjourned at 5:53 PM s/Corrin Wilde s/Rebecca L. Noah Casper Corrin Wilde, City Clerk Rebecca L. Noah Casper, Mayor 12