City Council Finance Committee Meeting

FINANCE COMMITTEE MINUTES January 16, 2020 The City Council Finance Committee of the City of Norman, Cleveland County, State of Oklahoma, met at 4:00 pm in the Municipal Building Executive Conference Room on the 16th day of .January, 2020, and notice and agenda of the meeting were posted in the Municipal Building at 20 I West Gray and the Norman Public Library at 225 North Webster 24 hours prior to the beginning of the meeting. PRESENT: Mayor Clark, Members Bierman, Scanlon. and Wilson ABSENT: none OTHERS PRESENT: City Council Member Scott City Council Member Petrone City Council Member Hall City Council Member Holman Darrel Pyle, City Manager Anthony Francisco, Director of Finance Gala Hicks, Director of Human Resources Kathryn Walker, Interim City Attorney Shawn O' Leary, Director of Public Works Travis King, Fire Chief Jane Hudson, Planning & Community Development Director Lisa Krieg, CDBG/Grants Manager Annahlyse Meyer, Chief Communications Officer Sara Kaplan, Retail Marketing Coordinator Jud Foster, Director of Parks & Recreation Brenda Hall, City Clerk Tim Powers, Director of Information Technology Ken Komiske, Director of Utilities Ronda Guerrero, Municipal Court Clerk Major Ricky Jackson, NPD Carrie Evenson, Stormwater Program Manager Kim Coffman, Budget Manager Jacob Huckabaa, Budget Technician Mindy Wood, Norman Transcript Scott Ma11in, Chamber of Commerce Dan Schemm, YisitNorman Robert Castleberry, Citizen Cynthia Rogers, Citizen Finance Commi ttee Minutes January 16, 2020 Page 2 Item I. being: MID-YEAR BUDGET REV IEW Anthony Francisco stated that the General Fund ended fiscal year 2018-2019 w ith a fund balance of $8.281,000. We started the current fi sca l year with a fund balance of abo ut $2 million more than we thought we would have. We used thi s extra fun d balance to fund the Transit Fund. This means we spent down the fund balance about $5.8 million and we w ill close this fiscal year w ith a balance of $2.465 million. This balance will be about $56,000 shott of our mandated 3% operating reserve in the General Fund. Sales tax revenues have been coming in basical ly on target, and use tax has been coming in above target. Franchise fee revenues have been way down and this means we will come in about $900,000 short of target. We project revenues to be almost right on target of projections overall, at about $400,000 short. We project that we will c lose this fi sca l year with a fund balance of about $2,088,000. Our sales tax revenue projections were based on ending the tax apportionment to the Uni versity North Park Tax Increment Finance District (UNP T IF) Fund. The adoption of this Ordinance by the Council would have supported this budget. This Council action is now being held in abeyance due to a petition against the Ordinance. This creates an unmanageable problem for us by leaving a $3.5 million hole in our revenue budget. We project that we will now have to draw down the Genera l Fund balance by $7.5 million, which will leave us closing the fiscal yea r with on ly $760,000. This is an unacceptably low fund balance, at less than 1%. If all of this comes to pass, we will close the fiscal year $1. 7 mil lion short of our mandated 3% operating reserve. This reduced carry-over fund balance means we w ill close the next fiscal year w ith a negative $3.3 million fund balance, wh ich is illegal by State law. It would be a very imprudent decisio n to draw on the Rainy Day Fund to address this budget sho1tfall , especially below the mandated minimum 3% reserve. Francisco gave a handout of options to address the budget shortfall. The Finance Committee needs to add ress this sho rtfall now, as it cannot be kicked down the cu rb for later. In the November Finance Committee meeting. the Council directed avoiding cuts that involved layoffs of current employees. The proposal in the handout cuts out many services and reduces even more. Member Wilson asked w hat other options the Council could have taken in the past to address this budget issue. Francisco stated that in the past he has advocated for two major options: passing a Stormwater Uti lity to relieve the General Fund of the $3 million a year that goes to Stormwater related se rvices, and to end the apportionment of sales tax to the UNP T IF Fund as quickly as possible. Member Wilson stated that she does not suppott ending fundin g for o utside agencies. Francisco stated that in the lo ng run, we need to look to other revenue sources besides sales tax collections, or this will continue to be a problem. Member Bierman stated that she doesn' t feel ready to recommend any of these actions until we have a public hearing about the problems and get input from the citizens. Finance Committee Minutes January 16, 2020 Page 3 Items submitted for the record: I. Mid- Year Budget Review for fiscal year 2020 ****** Item 2, being: SUBMISSION OF THE REVENUE/EXPENDITURE REPORTS Items submitted for the record: I. Summary of Major Fund Revenue Sources vs. Budget FYE 2020 as of December 31, 2019 2. Summary of Major Fund Expenditures vs. Budget FYE 2020 as of December 3 I. 2019 3. Appropriations from Fund Balance FYE 20 4. General Fund Transfers over $50,000 between Expenditure Categories FYE 20 December 2019 5. Norman Forward Sales Tax Financial Repo1ts 6. Inter-City Sales Tax Growth Comparison * * * *** Item 3, being: SUBMISSION OF THE REPORT ON OPEN POSITIONS Member Bierman stated that we should freeze the Sustainability Coordinator since it is one of the few that hasn't previously been filled. There are currently still 4 open Police Communications Officer Positions. Member Bierman stated that it would be better to put a freeze on all of the open positions than to have to lay people off. Items submitted for the record: I. City of Norman Position Vacancy Report dated 1/8/20 ** **** Finance Committee Minutes January 16, 2020 Page 4 Item 4, being: MISCELLANEOUS COMMENTS None at th is time. ***** * ATTEST: City Clerk