City Council

MINUTE RECORD PAPILLION CITY COUNCIL BUDGET HEARING MINUTES TUESDAY, SEPTEMBER 6, 2022 7: 52 P. M. The City Council of the City of Papillion met in open and public session in the City Council Chambers at Papillion City Hall, 122 E Third St, on September 6, 2022, at 7: 52 PM. City Clerk Nicole Brown called the roll. Present were Councilmembers Steve Sunde, Tom Mumgaard, Jim Glover, Gene Jaworski, Lu Ann Kluch, Bob Stubbe, Steve Engberg, and Mayor David P. Black. Councilmember Jason Gaines was absent. Also present were Deputy City Administrator Phil Green, Deputy Administrator of Community Development Mark Stursma, Assistant City Attorney Carla Heathershaw Director Risko, Police Facilities Mike Kleffner, Parks & Chief Chris Whitted, Fire Chief Bill Bowes, Public Works Director Tony Gowan, Recreation Director Tracy Stratman, Finance Director Nancy Hypse, Library Director Matt Kovar, Chief Building Official Brad Sojka, and Human Resources Director Carrie Svendsen. Mayor Black led those present in the Pledge of Allegiance. Affidavit of Publication: Notice of the meeting was given in the Sarpy County Guide & News, the designated method of giving notice. A copy is available in the office of the City Clerk. Incorporated herein by reference as if fully set out herein is the audio and visual recording of the council meeting. Public announcement that a current copy of the Open Meetings Act is posted in the Council Chambers. ORDINANCES SECOND READING AND PUBLIC HEARING: ORD. 1974— An ordinance to approve the FY2022/ 2023 Budget— Nancy Hypse— 597- 2020. Mayor Black briefly explained legislation from the State requiring the budget hearing to be held separately from a regularly scheduled Council meeting. He also explained the requirements set by new legislation from the State regarding when a city must participate in an additional public hearing with the county. He then provided a presentation of the FY2022/ 2023 Budget, which is attached hereto. Councilmember Sunde stated that the budget letter refers to a median home price of$ 220, 000, which he believes is considerably lower than what is actually on the market. Mayor Black explained that the MLS market reports include home prices in SIDs, while the Census Bureau only looked at homes within city limits. He then explained how the data is calculated. Councilmember Stubbe asked which taxing authorities are subject to the additional public hearing with the county. Mayor Black explained that it primarily applies to the school districts, the county, and the cities within the county. Mayor Black opened the public hearing and called for proponents and opponents. No one came forward and the public hearing was closed. 1 September 6, 2022 ADJOURNMENT: Motion to adjourn by Councilmember Glover, second by Councilmember Jaworski. Upon roll call vote, Sunde, Mumgaard, Glover, Jaworski, Kluch, Stubbe, and Engberg all voted yes. Voting no: none. Absent: Gaines. Motion passed. Meeting adjourned at 8: 27 PM. CITY OF PAPILLION DAVI . LACK, MAYOR ATTEST: NICOLE BROWN, CITY CLERK o, eoRATE ...( S L) U ' U t±.,„ cep Q MAY 9 ^ , sx NE? c` 2 September 6, 2022  of PAp4 CITY OF PAPILLION 44,, David P. Black, Mayor 6 l22 East Third Street Papillion, Nebraska 68046 Phone: 402- 827- 1111 ED Fax: 402- 339- 0670 July 29, 2022 Papillion City Council Members: I am pleased to provide you with the proposed budget for Fiscal Year 2022/ 2023. The City remains in a healthy position as we like our citizens and businesses) continue to face several unknowns with the national economy and inflation. Not that we need reminders; however, I do feel it is critically important to keep a broader perspective in order to appreciate and understand the importance of our fiscal policies and to understand the proposed budget: 9. 1% Inflation Rate for the 12 months ending June 2022 which is the largest increase since 1981( U. S. Labor Department 07/ 13/ 2022); 9. 5% increase in the Consumer Price Index for the Midwest Region for All Urban Consumers( CPI- U); energy prices up 44. 5%; and food prices up 11. 9% over the year( U. S. Bureau of Labor Statistics 07/ 2022); 5. 9% increase in Social Security benefits in 2002( Social Security Administration 10/ 13/ 2021) with a 10. 5% increase projected for 2023( Forbes 07/ 24/ 2022); 0. 75% increase in the short-term borrowing rates by the Federal Reserve announced just two days ago which is on top of increases of 1. 75% earlier in the year resulting in the largest increase in almost 30 years; and It could be argued that we have entered a recession based on the long- standing historical definitions of a fall in the GDP for two consecutive quarters. None of us have a crystal ball to say if this is a temporary bump in the national economic road; a one- year issue or a two- year challenge. No matter the duration, we should do some planning with the worst in mind and hoping for the best. This is a practice we have been using for quite some time and was a key reason we managed through the last 18 months without impacting services. We will continue the same practice with this budget. I am pleased to share with you that we are able to once again, for the second year in a row, reduce our Property Tax Levy 2% over the current year. Papillion' s City levy continues to be the lowest levy of all the communities in both Sarpy and Douglas Counties. Our ability to reduce our levy two years in a row and continue to have the lowest levy is due to the long- term policies of the elected officials, the strong financial planning over the past several years, the professional staffs management of the City' s daily operations, and the community' s continued growth. As we have been doing each year, we continue to focus on our continuing growth so as to not get behind in services while at the same time retaining our strong sense of community. Towards this goal, this year' s budget focuses on continuing the street improvement plan without the use of financing; hiring of some additional staff as we manage the City' s rapid growth; and continuing to focus on creative non- staffing solutions where possible. As with the prior years, the budget does not call for the City to issue any new bonded debt. In all of our long- term planning we always factored in a " bad time". I was always thinking it would be a recession and not a global pandemic. Well, last year was the global pandemic and this year may be the recession — two " bad times" in a row. I cannot thank you enough for the support and prior planning that put us in a position to get through both of these events in a healthy fashion while setting us up well for our continued growth into next year. In line with the individual budget meetings that I held with each of you, here are the highlights of the FY 2022/ 2023 Budget: 1I . 3 GENERAL FUND REVENUE Sales Tax is consistently our largest source of revenue at 35% of total revenue. We are projecting $ 12. 9 million, for kGENERAL FUND REVENUE which represents a 4% increase in Sales Tax the eY'„ uev Fees and upcomingg year and P a 3% increase for the last twoyears. of Taxes Other Sales Tax Permits u 35, 1% For a second year in a row, the Property Tax Levy will be • ' Cos v+bu; i9ns 12. 5% 14% _„ 1. 13a reduced by 2% compared to last year' s levy, lowering the zo 3 levy to approximately $ 0. 43 per $ 100 of valuation. Preliminary assessed valuation indicates a 9. 96% increase for a total assessed valuation ( approximately 5. 5% from new construction and 4. 46% from reevaluation of existing • properties) for an approximate $ 3. 2 billion valuation Street generating $ 6. 6 million in general fund revenue. A Allocation majority of this new growth can be attributed to new = 6, 4% Occupation n ti it ' a developments and buildings. Considering how the current Tax Property Tax 1d. i' economy is currently performing, other revenues are projecting conservative increases, consistent with their levels prior to the Covid- 19 pandemic. GENERAL FUND EXPENDITURES Combined departmental personnel costs represent the single largest expense in the General Fund at GENERAL FUND EXPENDITURES approximately 70. 6% of total expenditures. The proposed A budget accounts for wage increases and health insurance 1 benefits consistent with the union agreements and up to Police, 24. 0% a 3% wage increase for management- exempt employees. F" , j Health and dental insurance premiums projected are at 1 15%. Workman' s Compensation is projected to increase by 3%. Life and long- term disability are not increasing. Most staffing issues were resolved last year with several critical hires. Due to that, only minimal hiring of new staff = o., i, „, is necessary in the budget to keep up with growth. As far Streets, su" ' °—` p asgeneral fund hires, onlyone part- time Human r 1s% Tannin Resources department secretary has been added to the 1. 9% Recreation, IT, 1. 9% 3% budget for the upcoming year. The Communications sewer in. Admin 7, 7%! of Taxes, department is also hiring a part- time public safety I. 1 community outreach position ( general and fire department funds supported) in the current budget that will be carried into the proposed budget. In line with Council priorities, the proposed budget continues to invest in supervisor and leadership development. Consistent with past years, Public Safety includes the two largest General Fund budgets. The Police Department continues the strong relationship with the school district and retains its professional CALEA certification ( our 4th recertification was just received this week). It also has funding to start the design to renovate the police station to meet the department' s needs for the next ten years. The Fire Department, through the partnership with the City of LaVista and the Papillion Rural Fire District, will see our two partners funding 58. 8% of the Fire budget, with fees covering an additional 8. 4%. Their budget includes upgrades to the software systems for patient care reporting, EMS billings, and fire records management. 2). 0 3 This will be the fifth year in a row that we made a serious investment in Streets( inside city limits) through the development of the long- term Pavement Management Plan to keep all streets at, or above, an acceptable standard. The first year was the creation of the data- driven plan which mapped and graded all streets within city limits. That Plan allowed us in FY 19/ 20 to make a four- fold increase in the street repair budget to$ 2. 2 million and that level was maintained in the FY 20/ 21 budget. This year' s budget proposal calls for nearly $ 2. 4 million ( inflation factor) to be managed based on the Plan. Additionally, we continued to retain over$ 200, 000 in general pothole and street repairs. Like the last three years, both the plan and the repairs are fully funded from cash reserves without debt financing. In addition to the Pavement Management Plan, the Capital Improvement Plan ( CIP) contains $ 2. 425 million in additional h& funding, projects include 90' Street, S. 90` Highway 370 turn lanes, improvements at S. Washington & Cedardale, improvements at Cedardale & Highland, reconstruction of Monroe Street, replacement road at Walnut Creek Lake, traffic signals, a dump truck, a street vehicle and three police vehicles. All CIP projects are on the current plan and scheduled to be paid without any debt financing. The percentage of the total levy being dedicated to the Bond Fund is approximately 23. 7%. Outstanding debt for the Bond Fund is$ 93. 215 million, which includes$ 64. 825 million for the voter- approved Papillion Landing. Total annual debt service, excluding Papillion Landing, is$ 4. 35 million. The cash reserve of the bond fund is approximately$ 6 million. We continue to hold a high- grade investment rating( Aa1) from Moody' s with our general obligations( upgraded from Aa2 in April 2018). OTHER The Recreation Fund includes the Papillion Landing and Fieldhouse complex, along with non- revenue generating recreation programs, such as the Farmers Market, Easter egg hunt, kid day camps, the race series, free events and movies, and other civic uses. The non- revenue generating programs of the Recreation Department are budgeted through the General Fund at approximately$ 193, 711, excluding staff. While a major portion of the Landing complex is supported by revenue generated by memberships, user fees, donations and other non- tax revenues, there is a portion of staff that is allocated to the General Fund for broader community recreation programming and services, including at Papio Bay and Sumtur Amphitheatre. The Water and Sewer Funds are proprietary funds and are both budgeted to operate within the guidelines established by the previously Council- approved rate studies. Outstanding debt of the water fund is $ 8. 915 million with annual debt service at about$ 1 million. There is nearly$ 9 million in unrestricted reserve in the Water Fund. Included in the Water Fund' s proposed budget is funding for the painting of the north water tower, and a trailer for emergency water main break repairs. The Sewer Fund includes sewer relining projects, and the addition of two full- time sewer employees for the maintenance operations of the city sewer lines. We continue to maintain a high- grade investment rating( Aa2) from Moody' s for this proprietary fund. The Golf Fund is also a proprietary fund with revenue from normal operations. Golf Fund' s proposed budget includes a full- time golf professional to keep up with the increasing demand at both golf courses. The proposed budget also includes a lease- purchase for golf carts, routine cart path repairs at both courses, annual tree work at both courses, tee expansion and upgrades at Eagle Hill' s Hole# 12, and some irrigation repairs at both courses. Also included is using$ 150, 000 from the Golf Fund reserves towards the Golf Fund' s bond payment. The voter- approved 1/ 2 cent sales tax is by law dedicated for parks and recreation and cannot be used for general operations. The primary use of the 1/ 2 cent is for the bond payments on Papillion Landing. The proposed budget fully funds our bond obligations, and the required reserve as defined by Council policy remains fully funded. This budget includes the carryover of 700, 000 of the 1/ 2 cent sales tax to be managed under the recently adopted Parks Master Plan for a natural play area and needed upgrades to neighborhood parks as allocated in FY 2021/ 22. Newly funded items include play equipment for Schwer Park, lighting at Halleck West Field, and the design for the Halleck Park Loop Road. The Community Betterment Fund includes funding for an entrance sign for Halleck Park Arboretum, contribution for matching funds to the proposed Chief Black Elk Sculpture at Black Elk Recreation Area, natural bike trail project at the Landing, support of the proposed Arts Foundation, funding for Leadership Sarpy Legacy projects, finalizing the Veterans Park enhancements, additional and annual replacement American Flags, and replacement banners. Also included as carryover projects from the m 3) current year are an additional restroom at Walnut Creek Recreation Area near the site of the Nebraska Vietnam Veterans Memorial and downtown revitalization. Funds for Community Betterment are generated through Keno and by law are restricted to community projects. The Covid- 19 pandemic created a lot of challenges and hardships for the community over the past two- and- a- half years. It has also provided a couple of unique opportunities for the City in the forms of federal relief dollar packages. The first package was the Coronavirus Aid, Relief, and Economic Security Act ( CARES Act) which was passed in March of 2020. The City received approximately $ 1. 3 million in CARES Act dollars. Approximately $ 90, 000 was spent in FY 2020/ 21 for upgrades to Police Department equipment and technology. The remaining CARES Acts funds are being budgeted in the proposed budget to go towards the Police Department renovation project. The City also received approximately$ 1. 7 million in CARES Act dollars for the Fire Department, which is reserved for use of the MFO. The Fire Department used their share of the CARES Act funds to renovate Fire Station# 3 in downtown Papillion. The second package was the American Rescue Plan Act( ARPA) and was passed in March of 2021. In total, the City will receive approximately$ 3. 6 million over two payments. The first payment has already been received in the current year' s budget. Since these dollars have more requirements on how they can be spent, the proposed budget is only showing receipt of the second half of these funds and design costs for the clear well infrastructure upgrade project at this time. The tentative plan is to use the remaining ARPA dollars towards the construction of the clear well project, with the project starting in FY 2023/ 24. Due to the Nebraska Advantage Act rebate program, the City has received notice that the State will be taking back$ 41 million in sales tax revenue, on a monthly basis, beginning in January of 2023. Thankfully, you Councilmembers had the foresight to approve a formal sales tax policy in 2019 to set aside anomalies received each month. City staff has been following the policy, resulting in the City having adequate funds set aside to off- set the sales tax shortages as a result of this large rebate. A big thank you to Nancy Hypse, Finance Director, who developed the model to calculate and to proactively capture these funds. We will continue to work with the United Cities of Sarpy County and the League of Nebraska Municipalities to try to educate the Nebraska Legislature on the critical importance of transparency related to both the State' s lack of sales tax reporting to the local municipalities as well as the need for insight into the Nebraska Advantage agreements the State reaches with private entities that rebates our voter- approved local option sales tax without our knowledge. CLOSING I want to personally thank each of you for your support as we continue to manage a rapidly growing community while retaining the lowest city property tax levy in the metro while still providing high levels of service delivery through effective management, growth planning and effective staffing. It is this support that has allowed us to now lower the levy two years in a row. For a perspective on how the budget impacts the citizens, the median home price inside City Limits is $ 222, 309 ( US Census Bureau). With the proposed$ 0. 43407 levy that median household would pay$ 965 a year. Assuming the average assessment increase of 4. 46% for this year, that $ 222, 309 home would have been $ 212, 817 prior to the Assessor' s revaluation. The 212, 817 with the current$ 0. 44285 levy the property owner paid$ 943 a year($ 78. 54 per month). So, the proposed 2% levy decrease results in an actual 2. 38% property tax increase($ 22. 44 a year or$ 1. 87 per month) for existing property which is well below the historical 3% the State has tried to manage to; well below the current inflation rate, CPI index and well below the Social Security increase. The$ 80. 42 per month in Property Tax is less than most choose to pay for either their home internet service or personal cell phone plan. For that$ 80. 42 they receive professional Police and Fire services along with Public Works, Library, Parks, Recreation, Planning, Building and all Administrative Services. I also want to thank our incredible employees that serve our residents. They faithfully, professionally, and diligently serve the community and support the established mission, vision, and goals of the Council. I am thankful to be able to present a budget that maintains our commitment to them. I want to thank City Administrator Amber Powers and Deputy City Administrator Phil Green for their strong leadership and balance of every day pressures with long- term vision and viability. A special thanks to Finance Director Nancy Hypse for herfiscal management, insights and wisdom. Thank you to each of the Department Heads who are true professionals in their fields. With all of the staff( full and part- time) we have a great team, full of professional civil servants, that truly care about Papillion! 4IL' _ _ As you can hopefully see, the Mission that you created at the 2020 Council Retreat continues to be displayed in the budget priorities: To preserve our small town feel and promote quality of life, while delivering exceptional services for our residents, visitors, and businesses, and to sustain an environment( physical, social, and economic) that people are proud to call" home". The Goals underlying the Mission that were established during that same Council Retreat were strong guidelines for the Department Heads as the budget was developed. Another thanks to Ms. Hypse and her team. As you know we once again were awarded the Certificate of Achievement for Excellence in Financial Reporting ( COA) by the Government Finance Officers Association ( GFOA). The COA recognizes governments that go above and beyond the minimum requirements of Generally Accepted Accounting Practices ( GAAP) by preparing a Comprehensive Financial Report and then voluntarily submitting it for review by a professional board. A goal of the COA is transparency in financial reporting. Ms. Hypse' s team has been participating in the program over the last decade. Thank you! Finally, I thank you for your leadership that continues to allow Papillion to thrive as a place that" feels like home". If you have specific questions on the budget, please feel free to reach out to Ms. Powers, Mr. Green or myself. It is an honor to serve alongside you. Sincerely, David P. Black Mayor 5la „ ..