City Council

November 28, 2018 CITY OF SARATOGA SPRINGS City Council Meeting Saratoga Springs City Center 522 Broadway Saratoga Springs, NY Meeting Room 2A 7:00 PM CALL TO ORDER ROLL CALL SALUTE TO FLAG PUBLIC COMMENT PERIOD / 15 MINUTES PRESENTATION(S): EXECUTIVE SESSION: CONSENT AGENDA MAYOR’S DEPARTMENT ACCOUNTS DEPARTMENT FINANCE DEPARTMENT 1. Discussion and Vote: Proposed 2019 Amended Budget PUBLIC WORKS DEPARTMENT PUBLIC SAFETY DEPARTMENT SUPERVISORS ADJOURN City Council Meeting 11/28/18 November 28, 2018 CITY OF SARATOGA SPRINGS City Council Meeting Saratoga Springs City Center 7:00 PM PRESENT: Meg Kelly, Mayor Michele Madigan, Commissioner of Finance John Franck, Commissioner of Accounts Anthony Scirocco, Commissioner of DPW Peter Martin, Commissioner of DPS STAFF PRESENT: Lisa Shields, Deputy Mayor Mike Sharp, Deputy Commissioner, Finance John Daley, Deputy Commissioner, DPS Maire Masterson, Deputy Commissioner, Accounts Vince DeLeonardis, City Attorney Tara Gaston, Supervisor EXCUSED: Matthew Veitch, Supervisor Joseph O’Neill, Deputy Commissioner, DPW RECORDING OF PROCEEDING The proceedings of this meeting were taped for the benefit of the secretary. Because the minutes are not a verbatim record of the proceedings, the minutes are not a word-for-word transcript. CALL TO ORDER Mayor Kelly called the meeting to order at 7:00 p.m. PUBLIC HEARING Commissioner Madigan advised this is a continuation of the second public hearing regarding the 2019 Comprehensive Budget that originally opened on November 5, 2018. She stated this is an opportunity for the public to ask any questions or comments regarding the 2019 Comprehensive budget. Commissioner Madigan explained that this public hearing would remain open until the budget passes. If it passes tonight, she will officially close the November 5 public hearing. 2 City Council Meeting 11/28/18 She asked that anyone wishing to speak give his or her name and address. Sam Brewer, Lake Avenue questioned the budgeted proposed purchase of Motorola radios; he would like more detail. Commissioner Madigan advised him that this is a comment period only; he should contact someone in the Public Safety Department. No one else spoke, however the public hearing remains open. PUBLIC COMMENT PERIOD Mayor Kelly opened the public comment period. The public comment period is limited to fifteen minutes and each speaker must state their name and address and has two minutes to speak. Seeing that no one wished to speak, Mayor Kelly closed the public comment period at 7:04 pm. Since the only agenda item is the discussion and vote on the proposed 2019 amended budget, Mayor Kelly turned the meeting over to Commissioner Madigan. MAYOR’S DEPARTMENT Nothing at this time ACCOUNTS DEPARTMENT Nothing at this time FINANCE DEPARTMENT Discussion and Vote Proposed 2019 Amended Budget Commissioner Madigan said she is please to bring this proposed budget forward. She noted that the presentation displayed tonight has been loaded onto the laptops of the Mayor and each Commissioner. This is budget number seven submitted to the City Council for the taxpayers of this City. She explained that her budget process began with the call letter dated and sent July 20, 2018 requesting that each department submit their requested budget prior to the submittal deadline of August 16, 2018. Following this, each Department prepares their budgetary requests and projections and then Finance meets with each group individually to review both department and citywide priorities prior to the Comprehensive Budget presentation. Commissioner Madigan explained that per the City Charter, the Commissioner of Finance is required to bring the proposed comprehensive budget forward at the first City Council meeting in October, which this year was October 2. At that meeting, the first public hearing was set for October 16, the second public hearing was set for November 5, and that one remains open through this evening. There were also four budget workshops, October 17, October 22 October 24 and November 26, at which each department, including the Recreation Department had the opportunity to submit budget change requests for items that may have been excluded from the 3 City Council Meeting 11/28/18 proposed Comprehensive Budget. Commissioner Madigan advised that at each public hearing and workshop, time was set aside for the public to voice his or her opinion on the Comprehensive Budget. She explained that per the City Charter, the City Council shall adopt a Comprehensive Budget by November 30 of each year and that is the purpose of tonight’s City Council meeting. She noted that if the City Council fails to pass a budget by November 30, the Comprehensive Budget presented at the October 2 City Council meeting would become the budget for the ensuing fiscal year. Commissioner Madigan stated that each year her goal is to bring forward an amended City budget that is unanimously approved and meets the needs of the City at a price taxpayers can afford and she believes tonight’s budget meets that goal. The amended and proposed 2019 General Fund budget presented tonight totals $47.m, which is a 0.3% or $132k increase from the 2019 Comprehensive budget and a 2.1% or $964k increase from the 2018 adopted budget. She advised that, in addition to the General Fund operating budget, the City Council will vote tonight on the water and sewer budget, the Special Assessment District, the debt service budget, the City Center budget, and the capital budget. These other funds have increased $2.8m or 1.8% from the 2018 adopted budget largely due to a year over year increase in the capital budget. She noted that other fund information is included on the 2019 proposed budget summary handout and the budget materials available on the City’s website. Commissioner Madigan said that although the 2019 amended General Fund budget only increased 0.3% compared to the 2019 comprehensive budget, well over 100 budget line items were revised for the amended budget. Many of these changes were discussed in budget workshops and during City Council meetings. Commissioner Madigan reviewed the 2019 amended and proposed budget in a similar manner to the 2019 Comprehensive Budget and highlighted the most material revisions instead of speaking and explaining each of the amended line items individually. She pointed out the increase in several material line items of City revenue due to new information. NYRA admission tax was increased by $132k or 22.4% based on 2018 performance. The 2018 Saratoga Race Course meet drew over 1.1 million paid admissions for the third consecutive year and the City benefitted from the increased ticket cost. Sales tax and hotel occupancy tax were increased due to improved 2018 trend data; they are each on track for the best annual performance in City History, however neither were pushed aggressively for 2019 due to awareness of changes in the economy both locally and nationally that may negatively affect the financial well-being of City residents and guests. Commissioner Madigan pointed out that the Mortgage Tax revenue line is decreased to $1.3m or 3.7%, which is in line with what the City actually received in 2018. She explained that mortgage tax is one of the hardest line items to predict given the number of variables that affect it. While Saratoga Springs continues to be one of the most desirable places to live in the state, the City housing market will likely face rising interest rates and low inventory, especially for more moderately priced houses. Commissioner Madigan stated that several department income lines were revised as well based on input from departments or analysis done by Finance, though none materially. She presented a chart entitled “2019 Revenue Overview” that shows the breakdown of City revenue within the 2019 amended budget, explaining that it is largely in line with the chart exhibited during the 4 City Council Meeting 11/28/18 October 2 Comprehensive budget presentation, but the fund balance is decreased from 5.2% to 4.3%. She advised that lowering fund balance usage, specifically the unassigned fund balance was a priority and she presented a chart that indicates a decrease from $2.2m to $1.7m, which is largely attributed to the use of the second type of restricted fund balance, the reserve for bonded indebtedness. She clarified that this is more than she has used in the past but she is comfortable using the $1.7m given the City’s overall fiscal health. These funds are built with taxpayer dollars so using them to maintain a stable property tax rate is the best way, and essentially the dollars are going directly back to the taxpayers in order to maintain taxes and meet the City’s ever-increasing service demands. Commissioner Madigan explained that unassigned fund balance is drawn if and when it is needed which has not happened in prior years despite its usage being budgeted because of the City’s conservative approach to budgeting that has largely resulted in annual surpluses during her time in office. If it is necessary to use the $1.7m unassigned fund balance currently budgeted in the 2019 amended budget, the City would still be well within the 10-25% acceptable range described in the City’s finance policy, so there would still be healthy fund balances going into 2019. Commissioner Madigan said that Debt Servicing represents principal and interest paid on City debt bonded for capital projects excluding water and sewer. She stated that Restricted Fund Balance Usage increased by $400K from the comprehensive to the amended comprehensive budget. She clarified that funding came from the reserve for bonded indebtedness which exists to provide tax stabilization solely through the debt service budget and was funded by the City Council in the amount of $1m as part of the 2017 excess fund balance recommendations unanimously approved at the September 17, 2018 City Council meeting. Utilizing this reserve allows the City to maintain a stable tax rate while meeting critical budgetary needs without using an inappropriate amount of unassigned fund balance which is the one the rating agencies examine closely, so it is important to ensure that the unassigned fund balance is healthy. Commissioner Madigan reported that property Taxes remain stable for 2019. Those residing in the inside district will see a 0.33% increase to a rate of $6.0755 while those in the outer district will see a 0.43% increase to a rate of $6.0102 which averages out to a 0.38% increase over all. She noted that the City’s stellar bond rating allows for relatively easy access to financing but we must be cognizant of the costs, especially as more money is borrowed, a fact that is particularly important to be aware of because more money materially will be borrowed in 2019 than in prior years. She advised that we would know more about the financial impact of the capital budget bonding once the bonding process begins during the first quarter of 2019, which will be driven by interest rates associated with City debt. Commissioner Madigan presented a chart of 2019 Expense Overview indicating that the change from the 2019 Comprehensive budget to the 2019 Amended budget amounts to a 0.3% increase in aggregate, although there is a fair amount of change in the various types of expenses and 83% of City expenses relate to personnel and benefits. Following the Expense Overview chart was a chart of budgeted Personnel expenses from 2014 through the 2019 amended budget showing that Personnel, the largest city expense increased in the 2019 amended budget 0.8% over the 2019 Comprehensive budget, which is a 4.4% increase from 5 City Council Meeting 11/28/18 the 2018 adopted budget. The reason for the increase is the inclusion of three new hires, including a DPW Dispatcher, a DPW Laborer and a Citywide Communications Manager and an additional part time position in the Department of Public Safety, Traffic Division. There are also two upgraded positions, one in the Department of Accounts to a Director-level position and the other, an upgrade for the City’s Recreation Director. Commissioner Madigan announced that from the 2019 Comprehensive Budget to the 2019 amended budget, benefits cost decreased 3% largely due to a change in the pricing structure of the City’s health care plan and there will be additional details on this provided at a future City Council meeting. Other increased expenses include appraisal services increased to $80k in the 2019 amended budget to help clear the backlog of projects. There was also $15k included in the Land Use Board Services line to assist the Board with more complex projects before the Land Use Boards. She noted that both of these pieces are below the amounts requested by each department and these amounts will each be evaluated mid-year to determine whether usage of contingency funds is appropriate. Commissioner Madigan said that a $56k correction was made in the 2019 amended budget for Engineer usage by the Mayor’s department for which there is an offsetting revenue line item. There was also $45k allocated in the 2019 amended budget for an open space plan consultant since the open space plan is explicitly referenced in the City’s Charter and this is a decrease from the $60k originally requested. She thanked Tom Denny for his presentation to the City Council on November 5. Commissioner Madigan said other increases in expenses include an increase of $40k in IT service related contracts to account for the City’s ongoing agreement with NYSTECH and other IT and Smart City initiatives. There was also $40k budgeted for the purchase of a new police vehicle to replace a marked vehicle struck by another vehicle last winter and the Police Equipment line was increased from $25k to $50k to cover outfitting the new vehicle and also for replacement radio equipment and body cameras. She said that the Contingency line increase from $125k to $175k ensures that the City is well prepared to handle unplanned expenses at a moment’s notice and gives the City Council the flexibility to re-visit items mid-year. Commissioner Madigan stated that the 2019 amended Capital Budget is $9.3m or $7.6m excluding water and sewer. The driver of the increase from the 2019 comprehensive budget to the 2019 amended budget is the reconstruction of City Hall. Although $5.8m is budgeted within the capital. budget, the overall cost of reconstructing City Hall is estimated to be $11.2m with the remaining funding for the project coming from capital that has already been bonded, City reserves, and insurance proceeds which are estimated to cover approximately half of the entire project. Other capital projects included are the replacement of a twenty-year old fire engine and an eleven-year-old ambulance, which is necessary to ensure the safety of City residents and personnel. She described additional bonded capital projects as the Loughberry Lake Dam Project, a multi-year initiative with geo-technical design and permitting work done in the first year; the purchase of a Utility Bucket Lift and a tree chipper; and recreation related projects including Ice Rink rehabilitation work, and the renovation and replacement of playground equipment. The City’s contract with the School District would fund the upgrades to the East and West side recreation fields so bonding of that project is not necessary. Commissioner Madigan said that lightning striking City Hall the day after requested budgets were due made for an interesting start to the process. She thanked every City Hall employee 6 City Council Meeting 11/28/18 that assisted with the budget and with getting City operations up and running so quickly and smoothly at the Recreation Center. She said that a government that communicates and works well together is never a given regardless of the form of government, but if lightning was destined to strike City Hall during her time in office, she is thankful that it was with this City Council and with this group of employees. She believes this is an excellent budget for the City departments and the taxpayers. The council has joined in setting priorities for 2019 while delivering excellent City services and she thanked them for a positive and productive 2019-budget season. She thanked Deputy Commissioner Sharp for his time, dedication and effort in putting this budget together. Commissioner Madigan moved and Commissioner Franck seconded to request City Council approval of the proposed 2019 Amended Budget presented as the 2019 adopted City Budget. Mayor Kelly thanked Commissioner Madigan and Deputy Commissioner Sharp for their hard work conducting workshops and continuously communicating with the City Council on how this can work and it made the process smooth despite the City Hall fire. Commissioner Scirocco agrees and although the fire made it a difficult year, he is confident this is a good workable budget. Commissioner Martin thanked Commissioner Madigan and Deputy Commissioner Sharp and the entire City Council for working cooperatively on this budget. This is the first City budget he has had an opportunity to participate in and he can now attest to the difficulty of putting together a budget that keeps taxes at a reasonable level and simultaneously provides all the services required and needed by the City. This budget puts the Public Safety Department in a good position to continue to provide top-level services thanks to the efforts of the entire City Council. Commissioner Franck said the Accounts Department is thankful, especially for the additional funds to help his small Assessment office catch up with appraisal services that could provide additional revenue in 2020. He has been through the budget process many times and this was done exceptionally well in a short time. Commissioner Madigan said she is pleased with how the budget turned out and she feels the assessment project is important for 2019 and it could come with more recurring revenue. She added that the Battalion Chief is included as one of the upgrades within the budget. She is anxious to get City Hall renovations, repairs bonded and the work complete so the City Hall operations can return to the downtown location because it is good for community relations and beneficial to the Downtown Business District. Ayes all. Motion passes. Commissioner Madigan announced that with the successful adoption of the 2019 budget, the 11/5/2018 public hearing is now officially closed. 7 City Council Meeting 11/28/18 PUBLIC WORKS DEPARTMENT Nothing at this time. PUBLIC SAFETY DEPARTMENT Nothing at this time. SUPERVISORS Nothing at this time. ADJOURN Mayor Kelly adjourned the meeting at 7:25 p.m. Respectfully submitted, Nancy Wagner Clerk Approved: 12/18/18 Vote: 5 - 0 8