City Council

CITY OF POCATELLO, IDAHO CITY COUNCIL MEETING - BUDGET DEVELOPMENT MAY 2, 2013 Mayor Brian Blad called the City Council meeting for budget development to order at 9:07 a.m. Council members present were Roger Bray, Steve Brown, Craig Cooper, Jim Johnston, Gary Moore and Eva Johnson Nye. Council member Steve Brown was excused. 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 2014 Budget. During the discussion, it was noted that the projected Sales Tax revenue for Fiscal Year 2014 is estimated at $4,024,891.00. The Highway User revenue is still a declining revenue source for Pocatello. The 2014 estimate is lower than the previous year and the purchasing power for this source continues to decline. Council Guidance for 2014 Sales Tax Revenue is $3,900,000.00. Council Guidance for 2014 Highway User Fee Revenue is $1,800,000.00. Mr. Swindell noted that Building Permits fluctuate a great deal and is based on construction within the City. He explained that staff is starting to see an increase in the commercial construction, but projects continue to be slow. Big projects that took place in previous years have ended. Council Guidance for 2014 Building Permit Revenue is $400,000.00. It was noted that natural gas franchise revenue is influenced by commodity prices and the weather. Council Guidance for 2014 Natural Gas Franchise Revenue is $325,000.00. CITY COUNCIL MEETING -BUDGET DEVELOPMENT 2 MAY 2, 2013 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 2014 State Liquor Tax Revenues is $595,000.00 It was noted that liquor sales were steady at the beginning of the recession. Individuals later purchased alternative products such as beer and wine, but liquor sales are expected to start rising 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 still unknown when rates will return to historical norms. Council Guidance for 2014 General Fund Interest Revenue is $23,000.00. Mr. Swindell reviewed Cable Franchise Fees and the 2012 Idaho Legislature decision to eliminate the PEG fee for cities. He noted the prior 12 months without the PEG fee was $299,640.17. Council Guidance for 2014 Cable Franchise Fess is $300,000.00. Magistrate Court revenues for Fiscal Year 2012 were $288,769.24. 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 2014 Magistrate Revenue is $275,000.00. Mr. Swindell explained that Electric Franchise Fee revenue is also impacted by rates and snow pack. Council Guidance for 2014 Electric Franchise Fee Revenue is $350,000.00. Estimated fuel expense for City vehicles was discussed. The price per gallon volume for March 2012 through February 2013 was reviewed and staff recommended a $1,843,872.00 fuel budget for 2014. CITY COUNCIL MEETING -BUDGET DEVELOPMENT 3 MAY 2, 2013 Council Guidance for 2014 Fuel Expense is Fiscal Year 2013 City pump prices (per gallon) in the amount of $3.18 for unleaded and $3.37 for diesel. 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. He anticipates the value to increase by three percent. However, more information will be available in early May and into June to obtain a better estimated property tax. The Idaho Legislature recently approved a business property tax exemption and this may affect the amount to be received. Estimated labor costs for City employees including a cost of living allowance and medical insurance rates for Fiscal Year 2014 were reviewed. New labor requests by department were reviewed. Decisions on specific labor requests from departments will be made in June 2013. It was noted that there are possible increases to worker’s compensation rates and PERSI rates for all employees. Mr. Swindell reviewed the anticipated rate increase PERSI has already announced. However, he feels PERSI will defer on the increase for another 12 months. It was the Council’s consensus to keep the employer’s PERSI rate at 11.32% and instructed staff to monitor any changes. 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. Kim Smith, Human Resources Director, reviewed the Medical Insurance Blue Cross Renewal figures. She noted the initial renewal Increase at 4.49% which would keep both low and high deductible plans. The percentage would be less if the low deductible plan was eliminated. Ms. Smith reviewed the individuals that would be affected if the low deductible plan was eliminated. CITY COUNCIL MEETING -BUDGET DEVELOPMENT 4 MAY 2, 2013 Discussion followed regarding Health Care Reform requirements and the effect on medical benefits for current employees and retirees. Mr. Moore suggested eliminating the low deductible plan and requiring all City employees and retirees to use the high deductible plan. In response to questions from Council, Ms. Smith explained the highest medical claim ratio is from those that are in the low deductible plan. Budget guidance from the Council is to budget medical insurance costs for employees on the high deductible plan. Mayor Blad called for a recess at 10:12 a.m. Mayor Blad reconvened the meeting at 10:23 a.m. 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. -MAYOR/COUNCIL Anne Nichols, Assistant to the Mayor, reviewed BUDGET the Mayor/Council proposed budget for Fiscal Year 2014. She reported Mayor’s Office staff has been able to decrease the department’s budget in a few categories except for $150,000.00 that will be charged by Bannock County if a Mayoral Run-off election is necessary. She reminded the Council that an increase in Mayor and Council wages can be considered because it is an election year. Ms. Nichols noted a position for a Public Information Officer is in the budget. This position would be a single contact for all City departments which include Police and Fire. The proposed budget reflects a large increase for the cost of a Mayoral run-off election. Mr. Swindell reviewed the policy for a Mayoral run-off election. He noted that staff will seek Council’s direction if they want to continue the run-off election policy. Mr. Swindell stated the City can budget for a run-off election and if it is not needed, the funds will be placed in a contingency fund. He mentioned an increase in Mayor/Council salaries would be 5.75% to encompass what employees have received since the last increase. Mayor Blad thanked Ms. Nichols for her professionalism and all she does for the Council. CITY COUNCIL MEETING -BUDGET DEVELOPMENT 5 MAY 2, 2013 -FINANCE Joyce Strochein, Finance Manager, stated the DEPARTMENT increased labor expense for their budget is for a retirement payoff. She noted the payoff is for the Treasurer position and requested transitional training funds in the amount of $10,000.00. Ms. Strochein reviewed all of the positions in the Finance department and updated the Council on banking fees. Mr. Swindell reviewed changes that he would like to see in the treasurer position. By State Law the City is required to have a treasurer. Mr. Swindell would like to assume the title of Treasurer and reassign current positions in the Finance Department. It was the Council’s consensus that it would be worth investigating the restructure and allow $10,000.00 for training of the position. It was noted that this will affect the Fiscal Year 2015 budget. -BUILDING AND Lynn Transtrum, Building Official reviewed the CITY HALL Building Department and City Hall Custodial CUSTODIAL proposed budget for Fiscal Year 2014. He reported that has been working with the City of Chubbuck to inspect construction projects and it has been a positive experience. Additional revenue has been generated as a result. Mr. Transtrum proposed to reduce the full-time employee count by one position at this time because construction projects have been minimal. When construction increases the position may become necessary. Mr. Transtrum was joined by Larry Freeman, Head custodian, and reviewed Mr. Freeman’s duties. Mr. Transtrum reviewed the projects completed at City Hall and accomplishments to repair the building. It was noted that a few departments that are not located at City Hall and have outsourced their custodial needs, may return to having this done “in house”. Mr. Transtrum shared his concerns regarding City Hall and Police Department parking lots. In closing, he stated roofing and carpet replacement at City Hall need to be budgeted. -HUMAN Kim Smith, Human Resources Director, reviewed RESOURCES the Human Resources budget for Fiscal Year 2014. Ms. Smith mentioned Mike Duersch, Benefits Coordinator, is also planning to retire and would like to implement a similar process as replacing the treasurer position. Mr. Cooper was excused from the Council Chambers at this time. CITY COUNCIL MEETING -BUDGET DEVELOPMENT 6 MAY 2, 2013 In response to questions from Council, Mr. Swindell explained each department has different business machine needs and keeping vendors in touch with multiple departments helps secure a better price. Ms. Smith stated the “step in grade process” for employees is antiquated and suggested other methods to accomplish this. She feels a complete analysis of the position compensation program would be beneficial. Ms. Smith noted the current program is unclear and she does her best to balance this out with the processes in place. -INFORMATION Rick Parker, Chief Information Officer, TECHNOLOGY reviewed the major items being requested by his department for Fiscal Year 2014. He noted that education costs have increased because he added one of his staff to the education component. Mr. Parker explained computers for employees are updated every four to five years and this is outlined in his budget. -LEGAL/RISK Dean Tranmer, City Attorney, and Darcy Taylor, MANAGEMENT Senior Paralegal Assistant, reviewed the budget for the Legal/Risk Management department. Mr. Tranmer reviewed the problems with business machines used in the department and high number of repair/service calls that have been made. He explained an increase in education costs is for a staff member working toward her Bachelor Degree. Mr. Tranmer noted the reduction in salary costs is the result of a new attorney replacing Steve Herzog who successfully won the position of Bannock County Prosecuting Attorney. Kirk Bybee, Deputy City Attorney, and Tiffany Olsen, Prosecution/Risk Management Assistant, reviewed the fund 56 (Worker’s Compensation) program. It was noted an increase in this fund is the result of the following: 1) third-party Administrator by Intermountain Claims increased their fee; 2) increase in the processing of claims by providers; and 3) 2.5% increase to Idaho State Insurance Fund. Mr. Swindell feels City staff has a better handle on Workman Compensation claims to get people back to work more quickly. However, he noted Mr. Bybee is very busy with claims and will continue to evaluate the cost efficiency of having Legal staff process these claims. In closing, Mr. Swindell reviewed the budget meeting schedule and gave an overview of information that will be available on the City’s website. CITY COUNCIL MEETING -BUDGET DEVELOPMENT 7 MAY 2, 2013 A consensus of the Council on the Fiscal year 2014 Revenue Estimates & Selected Other Topics is attached as a permanent part of the minutes (see Attachment “A”). Mayor Blad adjourned the meeting at 11:52 a.m. APPROVED: BRIAN C. BLAD, MAYOR ATTEST: RUTH E. WHITWORTH, CMC, CITY CLERK