City Council

City of Saratoga Springs City Council Meeting Tuesday, March 13, 2007 CITY OF SARATOGA SPRINGS CITY COUNCIL MEETING CITY COUNCIL ROOM TUESDAY, MARCH 13, 2007 9:30 A.M. PRESENT : Valerie Keehn, Mayor Commissioner John Franck, Accounts Commissioner Ron Kim, DPS Commissioner Matthew McCabe, Finance Commissioner Thomas McTygue, DPW SUPERVISORS : Joanne Yepsen (left 9:50 a.m.) STAFF PRESENT : Lynn Bachner, Deputy Commissioner, Finance Michele Boxley, Deputy Commissioner, Accounts Eileen Finneran, Deputy Mayor CALL TO ORDER Mayor Valerie Keehn called the meeting to order at 9:30 a.m. PUBLIC COMMENT PERIOD Mayor Valerie Keehn opened the public comment period. Tom Torgensen, 258 Caroline Street, recommended that the Council contact Canadian Pacific Railroad and ask if they are interested in donating specific firefighting equipment to combat explosions. The amount of freight going through the City has increased tremendously since Canadian Pacific Railroad took over. There was a derailment in Oneida a few days ago where two propane tanks exploded. The Saratoga Springs freight yard is located near the medical facilities, Sunnyside Gardens and the High School. It would be a good location for the firefighting equipment. Canadian Pacific makes a tremendous profit and they may be delighted to help out the City. Mark Baker, City Center Authority, said that before the Council takes up the City Center appointments on their agenda, he wanted to remind them that consideration should be given to these individuals. He said they are volunteers who are due the highest level of regard and respect. Craig Clark, 40 Walton Street, said since the snow storm, 77 Van Dam Street and 25 Walton Street have not cleared their sidewalks. He said Old Saratoga Restoration does not shovel their sidewalks, rake their leaves or mow their grass. He suggested that additional one way signs be installed along Long Alley to help prevent cars from going the wrong way. He suggested some thought be given to allowing front end loaders on the upper level of the deck to remove the snow. Because it reduces the number of parking spaces when all of the snow is not removed, the cars park on the road and because the roads are already narrow, because of the snow, it just compounds the matter. He said that the pin which locked the gate from the garage to the alley is broken and cars are driving freely along this alley. He also noted that the former Railroad Alley is being used as a driveway by the Adirondack Trust Company and there is already too much traffic. 1 of 5 City of Saratoga Springs City Council Meeting Tuesday, March 13, 2007 Commissioner Thomas McTygue said the parking structure cannot handle the weight of a front end loader and a dump truck. Mayor Valerie Keehn closed the public comment period. MAYOR’S DEPARTMENT City Center Appointment – Roger Goldsmith (07-49) Mayor Valerie Keehn moved and Commissioner John Franck seconded to appoint Roger Goldsmith to the City Center Authority with a term of six years to expire on March 20, 2013. Ayes all. City Center Appointment – Rick Higgins (07-50) Mayor Valerie Keehn moved and Commissioner John Franck seconded to appoint Rick Higgins to the City Center Authority with a term of six years to expire on March 20, 2013. Ayes all. City Center Appointment – Dorothy Knowlton (07-51) Commissioner John Franck recused himself due to a potential conflict of interest. Mayor Valerie Keehn moved and Commissioner Matthew McCabe seconded to appoint Dorothy Knowlton to the City Center Authority with a term of six years to expire on March 20 , 2013. Ayes all. Commissioner John Franck resumed his seat on the Council. DEPARTMENT OF PUBLIC WORKS Water & Sewer Rates (07-52) Mayor Valerie Keehn opened the public hearing on the proposed water and sewer rates resolution. There being no one wishing to speak, Mayor Valerie Keehn closed the public hearing. Commissioner Thomas McTygue moved and Commissioner Matthew McCabe seconded to adopt the 2007 water and sewer rates as presented. Mayor Valerie Keehn said she opposed this proposal because the increase was retroactive to November 2006. She said it was equal to a 7 percent increase and is probably illegal or at a least very unfair. She said the City knew that it was going to be looking for increases with a $2 million deficit. It should have been addressed before this time. Commissioner Thomas McTygue said it was untrue that there was a $2 million deficit. DPW has been working with the Finance Department for months on this proposal. They are using the same process that they have been using for the last 50 to 60 years. They don’t know the revenues until the final readings are in and this is a minimal increase. Bill McTygue, Director of Public Works, said the water and sewer budgets were proposed and adopted in balance. They are asking for a modest increase. The City has one of the lowest rates in New York State. Increasing the rates is typically done in the beginning of the year because we don’t know that the last quarter revenues are until this time. Along with the water rate increase, there will be a significant decrease in the sewer rates for the low end users. He said it is not unlike electric bills – use the services then pay the fee. He said if the new rates were recommended at budget time without the last quarter it would have a tremendous impact on revenues. He said to buy a one liter bottle of water at the grocery store would cost more than $1. For that same dollar, a City resident can get 1,000 gallons of water in the City. He reminded everyone that the cost of investing in the water system through the major upgrades needs to be considered. The water budget also reflects the bonds for the water improvements. Mayor Valerie Keehn said the auditors found that in 2005 the water budget had a negative fund balance of $1.3 million and the sewer budget had a negative fund balance of $171,000. Bill McTygue said he would defer to 2 of 5 City of Saratoga Springs City Council Meeting Tuesday, March 13, 2007 Commissioner Matthew McCabe to comment on the auditors’ report. He said there have been fund balances from year to year. When there were fund balances no increase in the rates was sought. He was not sure how the auditors developed their report. He also pointed out that there is major equity in the fund balance. These budgets include labor and administrative costs. With the sewer budget, 58 percent of that budget goes directly to the County and the remaining 42 percent stays with the City for operational expenses. Commissioner Matthew McCabe said he has been working with DPW over the last several months to develop a plan similar to the general budget to move that budget away from the deficiencies. He clarified that the contingency line is a part of the budget which was different than the fund balance. He said a plan has been set into motion to build and maintain a fund balance. In the past the fund balance was used to offset increases. Over the years, that fund balance has been depleted. He said the plan set into place is proper and he would continue on this course. They need to have 12 months of data to discuss the rates. The audits have not identified this as a problem, however, it did not mean that it could not be changed. If it was called into question by the auditors, the practice would stop. Fund balances go hand in hand with better bond ratings. Mayor Valerie Keehn said it wasn’t until 2005 that water rates were increased, so the auditors had nothing to go on. Commissioner Matthew McCabe said that billing process has remained the same. Commissioner Thomas McTygue said the history of billing and adopting rates has not changed. Mayor Valerie Keehn said that in 1990 there was a flat minimum rate, in 2002 the flat rates remained the same, in 2003 there was a retroactive increase, in 2004, no increase and in 2005 a retroactive increase. Bill McTygue noted that in 2005 there was a decrease for the lower end users. Commissioner Matthew McCabe said the practice has been the same over the years. He said they need to have all of the data from 2006 before the can establish the rates for 2007. The taxpayers have been notified of this proposal. They are using the most up to date data to give the users the best rate possible. He said we were on the right track. Mayor Valerie Keehn asked if this increase would balance the budget. Commissioner Matthew McCabe said this will set the course, but it will not happen over night. Mayor Valerie Keehn asked if there would be another rate increase next year. Commissioner Matthew McCabe said that would depend on how much water was sold, connection fees, etc. This would be discussed during budget season. He gave an early revenue report at the last Council meeting that should help everyone. Mayor Valerie Keehn said in 2002 the water fund balance was negative $149,000, in 2003 it was at $768,000 and that was with a 3 percent increase, in 2004 there was a negative fund balance of $774,000 and in 2005 the negative fund balance was $1.3 million. Commissioner John Franck asked for clarification from Director of Finance Christine Gillmett-Brown. Christine Gillmett Brown said the numbers the Mayor was referring to were the modified accrual numbers from the financial statement. She said there are modified accrual numbers and full accrual numbers. Modified accrual numbers do not recognize the assets. The City has a fixed asset reporting method which is separate from this fund. Commissioner John Franck said that from a conservative view there is the real world and the governmental world of accounting. He said in the real world there is a $1 million surplus, however, from the conservative end that is not so. He said the only way to rectify this would be to increase the fees to close the deficit. Mayor Valerie Keehn said the rates were increased before and the deficit got larger. Commissioner Matthew McCabe said there were also some financial adjustments. He said the City must contend with a $750,000 increase in health insurance costs and some of those costs are passed on through the water budget. He said he stood by this proposal. They are on the right path. There will be detailed discussions during budget season and perhaps there needed to be some cuts. If the City sells more water, the numbers will be better. Bill McTygue said that when looking at the water budget from 2007 and 2005 there were increases in water administration of 14.3 percent, water treatment plant 9.4 percent, retirement of 96 percent, health insurance at 38.9 percent and a new line of debt service in the amount of $129,000 was added. While all of these increases were going on, the water revenue remained flat. He said the 2006 water revenue will be slightly less than the 2005 revenue. He said he had no desire to delve into the financial and audit records because they were so 3 of 5 City of Saratoga Springs City Council Meeting Tuesday, March 13, 2007 complicated, however, he urged everyone to review the budget because it was much was much easier to read. The proposed increase in the water rate is minimal. It amounts to 65 cent per 1,000 cubic feet. Mayor Valerie Keehn asked how many users were at the bottom level. Bill McTygue said the bulk of the users were at the lower end. He said the increase amounts to 65 cents for 15000 gallons of water. To put that into perspective one liter of water from the local grocery store would cost more than 15000 gallons from the City. At the same time of this water rate increase, there is a proposed decrease to the sewer rates of about 75 cents to the low end users. The flat rate charge of $50.85 for the low end users will be eliminated. This was good for all users. Mayor Valerie Keehn said that the high end users of the low end fees will pay about $3 more though. Bill McTygue said yes that was true, however, 58 percent of this goes directly to the County. He said that for years, the City ate the cost of the County increases. In 2002 there was a 38 percent increase in the sewer fees for City residents. That was reduced to 24 percent by using some of the fund balance. Mayor Valerie Keehn said County told her that they have not raised rates in seven years. Commissioner Ron Kim said he wanted to call the question. He said that administrative costs continue to rise and this was a reasonable increase. The bigger issue was the cost of public sector workers. It’s clear that in the 1950s public sector workers were paid less, but the cost of benefits has increased at a much higher rate than for the private sector. He said there are hardworking employees here in the City but the cost of pension and health care needs to be addressed. He supported this increase though. Commissioner Ron Kim called the question. Commissioner Thomas McTygue said he had a few more items to discuss. Commissioner Ron Kim withdrew his call for the question. Commissioner Thomas McTygue said there should have been this kind of discussion when the City adopted its tax rate. He said there were two public hearing on this matter and no one has spoken out against this increase. There was also a public meeting last night on this matter. He said there were no public hearings when the Mayor brought forth the recreation department fee increases and they were quite substantial. Mayor Valerie Keehn said they were not retroactive and if a user did not want to pay the fee they didn’t have to unlike the water fees which must be paid. Commissioner Thomas McTygue said more than 2200 accounts will see a reduction. The positive side of this is water conservation. It’s a good possibility that water consumption will go down. He said there is significant pressure to join the county water system. The City needs to protect its water source. He noted that the City has the sixth lowest water rate in the state. Residents such as John Kraus, Remigia Foy and Wilma Koss have all stopped by to talk about this issue with his staff and their questions were answered. Ayes: four; Nays: one (Mayor Valerie Keehn). Motion carried. PUBLIC COMMEN T PERIOD Mayor Valerie Keehn opened the public comment period. Wilma Koss, 160 Kaydeross Park Road, said in 2002, the County put into place a $20 surcharge to be set aside for a capital fund. The City’s rates went up, but the formula remained the same. Commissioner Thomas McTygue said the County also changed their billing procedures from flow to units. He said that when the City made major improvements in the sewer system which reduced the flow, the County changed their billing method from flow to unit. ADJOURNMENT Mayor Valerie Keehn moved and Commissioner Matthew McCabe seconded to adjourn the meeting at 10:30 a.m. Ayes all. There being no further business, Mayor Valerie Keehn adjourned the meeting at 10:30 a.m. Ayes all. Respectfully submitted, Kathy Moran 4 of 5 City of Saratoga Springs City Council Meeting Tuesday, March 13, 2007 Clerk Approved: 5 of 5