City Council

CITY OF POCATELLO, IDAHO CITY COUNCIL MEETING - BUDGET DEVELOPMENT MAY 3, 2012 Mayor Brian Blad called the City Council meeting for budget development to order at 9:05 a.m. Council members present were Roger Bray, Steve Brown, Craig Cooper, and Gary Moore. Council member Eve Johnson Nye arrived at 9:07 a.m. Council member Jim Johnston arrived at 9:55 a.m. David Swindell, Chief Financial Officer, stated that information regarding revenue estimates would be presented. The revenue sources that will be discussed are sales tax, highway user fees, building permits, natural gas franchise fee, State liquor tax, general fund interest earnings, cable franchise fee, magistrate court fines and forfeitures, electric franchise fee, and property taxes. Mr. Swindell stated that throughout the meeting he would be seeking decisions from the Council on what revenue figures to include in the proposed budget. He provided background information on the different revenues to be discussed. Council proceeded to review the information provided by Mr. Swindell and make suggestions for the revenue estimates to be used in the Fiscal Year 2013 Budget. During the discussion, it was noted that the projected Sales Tax revenue for Fiscal Year 2013 is estimated at $3,652,967.00. The Highway User revenue is still a declining revenue source for Pocatello. The 2013 estimate is lower than the previous year and the purchasing power for this source continues to decline. Council Guidance for 2013 Sales Tax Revenue is $3,600,000.00. Council Guidance for 2013 Highway User Fee Revenue is $1,800,000.00 Mr. Swindell noted that Building Permits fluctuate a great deal and is based on the construction in the City. He explained that staff is starting to see more on the commercial construction, but projects continue to be slow. Big projects that took place in 2011 have ended. Council Guidance for 2013 Building Permit Revenue is $400,000.00. It was noted that natural gas franchise revenue is influenced by the weather. Council Guidance for 2013 Natural Gas Franchise Revenue is $435,000.00. CITY COUNCIL MEETING -BUDGET DEVELOPMENT 2 MAY 3, 2012 Mr. Swindell explained changes in the State Liquor Tax estimates. The State of Idaho is increasing their “take” by 2% each year until it reaches 50% and anticipates this should be achieved in 2014. He noted the State Liquor Board estimates a 2% annual growth for cities. Council Guidance for 2013 State Liquor Tax Revenues is $560,000.00 It was noted that liquor sales were steady at the beginning of the recession. Individuals later purchased alternative products, but it appears liquor sales are raising again. Mr. Swindell reviewed General Fund Interest for the City which includes earnings from invested cash such as the state pool or bank money market funds. These rates have dropped dramatically and it is unknown when rates will return to historical norms. Council Guidance for 2013 General Fund Interest Revenue is $32,000.00. Mr. Swindell reviewed Cable Franchise Fees and the 2012 Idaho Legislature decision that decreased the PEG fee for cities. Council Guidance for 2013 Cable Franchise Fess is $300,000.00. Magistrate Court revenues for Fiscal Year 2011 were $253,160.00. Mr. Swindell stated that the recession has decreased the number of paid fines. He noted the collection process at Bannock County has changed and may be part of the reason the revenue has decreased. Council Guidance for 2013 Magistrate Revenue is $289,000.00. Mr. Swindell explained that Electric Franchise Fee revenue is also impacted by rates and weather. Council Guidance for 2013 Electric Franchise Fee Revenue is $345,000.00. Property Tax estimates were discussed and it was noted the City’s levy rate is the lowest it has been since 1986. In response to questions from Council, Mr. Swindell explained the process for the City’s portion of the levy rate and how it is set in the county. Mr. Swindell explained property assessment notices are mailed out in May and if a property owner does not agree with the estimate, they have an opportunity to appeal. The estimate for property tax revenue is sent out by CITY COUNCIL MEETING -BUDGET DEVELOPMENT 3 MAY 3, 2012 the County Property Assessor so cities will know what to expect in revenue and a budget can be set. The appeal process is not complete when the tax revenue estimates are mailed to cities, but these are the best estimates available. Estimated labor costs for City employees including a cost of living allowance and medical insurance rates for Fiscal Year 2013 were reviewed. New labor requests by department were reviewed. It was noted that there are less labor requests than previous years. Decisions on the labor requests will be made in June 2012. Mr. Johnston arrived at this time. Kim Smith, Human Resources Director, joined Mr. Swindell to discuss employee medical insurance costs. Mr. Swindell explained insurance claims have increased and the City’s cash reserves need to be restored. He reported a rate increase of 16% has been quoted for Fiscal Year 2013 and reviewed the optional programs/premiums for employees and the City’s share of medical insurance costs. Ms. Smith feels lower insurance premiums are not beneficial for the City. She explained that a reconciliation payment comes due at a later date and this additional payment is making medical costs more expensive. Large reconciliation payments are the result of more claims from employees. Ms. Smith stated Human Resource staff has researched other insurance carriers for comparison rates. In response to questions from Council, Ms. Smith explained there is a 4% increase for administrative fees. The City is Self-insured. If an entity is fully insured this cost is included with the insurance premium. Ms. Smith shared her concerns with the additional costs and the need to decide whether employees should receive a cost of living allowance increase and/or medical insurance premium increase. Mr. Swindell feels when the City became self-insured 10 years ago, it was a good idea. However, there has been a down-turn in the current market and the risk is increasing. Council discussion about medical costs for employees followed. It was noted that there is an aging workforce of City employees and medical costs are going up. City benefits for retirees were also discussed and changes were suggested that may help keep these costs down as well. CITY COUNCIL MEETING -BUDGET DEVELOPMENT 4 MAY 3, 2012 Estimated fuel expense for City vehicles was discussed. The price per gallon volume for March 2011 through February 2012 was reviewed and staff recommended a $1,802,574.00 fuel budget for 2013. Council Guidance for 2013 Fuel Expense is $1,802,574.00. Mr. Swindell summarized the budget decisions made in the earlier portion of the meeting. He announced that department briefings would be held at this time. Mr. Swindell reviewed the budget meeting schedule and gave an overview of information that will be available on the City’s website. -MAYOR/COUNCIL Anne Nichols, Assistant to the Mayor, reviewed BUDGET the Mayor/Council proposed budget for 2013. She reported Mayor’s Office staff has been able to decrease the department’s budget in a few categories. Ms. Nichols noted a new fireproof file cabinet for City records will need to be purchased. The proposed budget reflects increases in the cost for parade candy and City Code supplements. Mayor Blad noted that a Public Information Officer (PIO) was not included in the list of labor requests at this time. However, he feels the City will eventually need a PIO and plans to include the position for the next budget cycle. Ms. Nichols confirmed that she will continue to temporarily fill-in for the responsibilities of a PIO. -CUSTODIAL AND Mr. Swindell reviewed the Custodial and HOUSEKEEPING Housekeeping Department proposed budget for DEPARTMENT Fiscal Year 2013. He reported that WIFI access is being requested at a $10,000.00 price tag. He hopes this will set the ground floor for more use of electronic devices for meetings in City Hall. No new positions are being requested at this time. It was noted that concrete is not scheduled to be replaced so building repairs are $4000.00 less than the previous year. A consensus of the Council on the Fiscal year 2013 Revenue Estimates & Selected Other Topics is attached as a permanent part of the minutes (see Attachment “A”). Mayor Blad adjourned the meeting at 11:02 a.m. CITY COUNCIL MEETING -BUDGET DEVELOPMENT 5 MAY 3, 2012 APPROVED: BRIAN C. BLAD, MAYOR ATTEST: RUTH E. WHITWORTH, CMC, CITY CLERK