City Council

CITY OF POCATELLO, IDAHO CITY COUNCIL MEETING- BUDGET DEVELOPMENT JUNE 26, 2014 Mayor Brian Blad called the City Council meeting for budget development to order at 9:11 a.m. Council members present were Steve Brown, Craig Cooper, Jim Johnston, Gary Moore and Eva Johnson Nye. Council member Michael L. Orr was excused. David Swindell, Chief Financial Officer/Treasurer, overviewed the schedule of the meeting. He reminded the Council of the decisions made at the previous meeting on June 5, 2014 for budget development and reviewed the information handouts available. Mr. Swindell asked if the Council would like staff to offer a solution to close the $1,312,086.00 gap in the budget. Council declined, preferring to start from where they left off on June 5, 2014. Mr. Swindell offered one suggestion that might be helpful to balance the budget. He suggested using tax revenue in the amount of $200,000.00 that has been accrued from the Hoku Materials project. This would be in accordance with Tax Increment Financing (TIF) District guidelines. In response to questions from Council, Mr. Swindell explained the City can use Pocatello Development Authority (PDA) reimbursement funds for whatever purpose it decides. However, funds cannot be used by the PDA for purposes other than what the district was planned for. An approved purpose includes reimbursing the City for its Hoku land purchase. Council will need to convince PDA to give $450,000.00 to the City and use a portion to pay back a loan from the Sanitation Department and use the balance to help with the Fiscal Year 2015 budget shortfall or upgrades at the airport. In response to questions from Council, Lonnie Crowell, PDA Executive Director, explained multiple economic development projects are pending for Pocatello. However, Mr. Crowell stated he would support the Council’s decision to use TIF funds to help with the City’s budget or for economic development purposes. Council discussion regarding the future of the Hoku Materials site and continuance of the Hoku TIF district followed. It was the consensus of the Council to anticipate funds from the Hoku Materials site in the amount of $450,000.00 with $200,000.00 going to the General Fund after Sanitation’s loan was repaid. It was the consensus of the Council to anticipate a larger rebate for the City’s P-Card Program in the amount of $20,000.00. Council continued to consider solution ideas outlined on the Fiscal Year 2015 worksheet and reviewed property tax levy rates/percentages. Mr. Swindell noted Fiscal Year 2015 staffing increases include a slate of personnel requests from the Fire Department. He suggested changing two part-time positions for the Fire Department to one full-time position with an increase of $15,000.00. Mr. Swindell suggested using a portion of the City Hall maintenance fund to help with the budget shortfall.  2 CITY COUNCIL MEETING -BUDGET DEVELOPMENT JUNE 26, 2014 It was the consensus of the Council to utilize $80,000.00 from City Hall maintenance funds toward the budget. In response to questions from Council, Randy Ghezzi, Street Superintendent, explained anytime street improvements are made, the City is required to upgrade the curb to ADA standards. He suggested Council give him a target amount to decrease the Street Department budget and staff will determine the best course of action. Mr. Ghezzi mentioned many cities are being cited for failure to upgrade ADA ramps under the new requirements and some are being fined large amounts. Council members Brown and Nye suggested $100,000.00 should be cut from the Street Department budget. A majority of Council suggested $150,000.00 be cut from Street Department budget and allow staff to determine where the cuts should be. In response to questions from Council, Chief Marchand, Police Chief; and Jim Peterson, Assistant Chief; feel it would be difficult to make additional cuts to decrease their budget. Mr. Peterson explained if five patrol cars are purchased instead of seven, it will put them behind on the vehicle rotation. If Council wishes to decrease the Police budget by an additional $26,000.00, staff will strive to find it somewhere else instead of eliminating a vehicle. Mr. Peterson noted there was a situation when an emergency call was received and no vehicle was available for the officer to respond. It was the consensus of the Council to decrease the Police Department budget by an additional $10,000.00. It was the consensus of the Council to wait for more budget information and not decrease the Fire Department budget at this time. In response to a question from Council, Mary Remer, Animal Control Director, noted moving expenses may be less for Fiscal Year 2015 because staff may be able to pre-buy furniture and materials for the new Animal Shelter building. As a result, she suggested a decrease of $20,000.00 to her proposed budget and staff will utilize funds available in Fiscal Year 2014 for the purchases. In response to questions from Council, Alan Green, Interim Parks and Recreation Director, stated staff could defer the purchase of a steam cleaner. However, the Jib crane is for safety needs of staff while working on equipment. Mr. Swindell suggested not eliminating necessary equipment, but wait to update the bleachers at Watkins Park instead. It was the consensus of the Council to eliminate a proposed UTV purchase and bleacher replacement expense from the Parks and Recreation budget. Mr. Moore suggested replacing the lily pads in the activity pool and postpone installation of coin-operated lockers at the Ross Park Aquatic Center.  3 CITY COUNCIL MEETING -BUDGET DEVELOPMENT JUNE 26, 2014 It was the consensus of the Council to decrease the Ross Park Aquatic Center budget by $34,000.00 and allow replacement of the proposed lily pads. Council discussion regarding general operating costs, proposed increases in staff wages and increased costs for medical insurance followed. In response to questions from Council, Kim Smith, Human Resources Director, gave an update on the City’s Compensation study. She explained consultants hope to complete the process by the end of the year. Once the final results are found, staff will review and analyze the compensation study. Ms. Smith will update the Council on the progress and any suggested changes to compensation amounts. She explained the City is competitive at entry level jobs, but not professional and management positions. It was also noted that it is difficult to compare Pocatello’s wages and benefits with other cities because each city has different job descriptions and duties/responsibilities vary. Continued discussion regarding medical insurance costs as compared to what other cities pay followed. It was mentioned that in comparison with other cities, the City of Pocatello is generous to pay such a large portion of the family’s insurance. Concerns were shared regarding the challenge to stay competitive by meeting higher wages without increasing revenue. Mayor Blad called a recess at 11:26 a.m. Mayor Blad reconvened the meeting at 11:41 a.m. Mr. Swindell reviewed proposed staffing increases by department. Council’s decision regarding staffing is outlined on the Budget Decision Spreadsheet. Mr. Brown feels the budget shortfall is the result of a recent lawsuit against the City. The lawsuit eliminated the payment in lieu of taxes revenue from the City utilities to the City’s General Fund. He noted Council has deeply cut the budget. However, there are still necessary expenses that need to be funded. Mr. Swindell noted as a result of the lawsuit, customers have saved money on their City utility bill. He explained efforts to build the City’s budget for Fiscal Year 2015, based upon necessary cuts from the Fiscal Year 2014 budget, are not sustainable. Mr. Swindell explained the $2.5 Million decrease in annual revenue as a result of the lawsuit will affect the City from this point forward. He feels in order to meet the budget shortfall the City may need to increase the tax levy or decrease services. General discussion was held regarding raising property taxes and estimated construction fee income. Council also discussed capital cuts, service reductions and expense shifts for departments. Further recommendations were made for balancing the budget. It was mentioned that over the past two years major incidents have occurred which decreased the amount of funds available to the City. Nevertheless, Council must move forward to repair the deficit caused by the incidents. Council discussion continued regarding raising property taxes to help meet the budget shortfall.  4 CITY COUNCIL MEETING -BUDGET DEVELOPMENT JUNE 26, 2014 The Decision Spreadsheet showing the consensus of the Council is attached as a permanent part of the minutes (see Attachment “A”). Mayor Blad adjourned the meeting for budget development at 12:16 p.m. APPROVED: BRIAN C. BLAD, MAYOR ATTEST: RUTH E. WHITWORTH, CMC, CITY CLERK