Council Minutes
MINUTES - COMMITTEE OF THE WHOLE
Wednesday, June 27, 2001
The city council met as the Committee of the Whole on Wednesday, June 27, 2001 at 7:00 p.m. in the council chambers in City Hall with Mayor Brown presiding. Present at roll call were Council Members Brooks, Bjerke, Stevens, Hamerlik, Burke, Glassheim, Gershman, Lunak, Christensen, Kerian, Kreun - 11; absent: Council Members Klave, Bakken, Martinson - 3. (Council Members Lunak and Gershman on teleconference system)
Mayor Brown announced that when addressing the committee to please come forward to use the microphone for the record, and advised that the meeting is being televised.
GENERAL FUND BUDGET DISCUSSION
Mayor Brown stated that the budget process takes a lot of thought and discussion and working together and that he appreciates the input from citizens and council and stated that when he campaigned, it was a year ago tonight that we were sworn in, and learned a lot in that time - during that time found that discussion, thoughtful decision making was what they thought they needed to have for our government go forward and after going back and forth on the budget, first charged with a no mill increase, then re-assessed it and thought that we needed a 5 mill increase to provide the services we need, but through further discussion with staff we’re within $100,000 in our budget of having a zero mill increase budget, that together as council and mayor we can come up with the zero mill tax increase for the City’s portion of your tax dollar. He stated that they have decreased 27 mills out of the General Fund since 1997, and in last two years, have decreased the mill levy 22, and now important to send signal to the citizens at this time that we take their recovery seriously and even $20 a year for the City’s portion of the taxes may be considered excessive - that we will hold the line this year but need to do it responsively and not by spending reserves or shifting dollars but reasonably and thoughtfully and also realize in the future that we must have capital streams to support the revenue that we expend, that tonight our goal is to discuss the General Fund portion of the budget and limit our discussion to that and would like this process to go forward; that on Monday night (July 2) would like to introduce the mayor’s budget and table it so that at each special city council meeting we can discuss and amend that particular portion of the budget so that when get through will have had a thoughtful evaluation of the budget and confirmed our vision for the city and want Grand Forks to be a place that we want to live and feel that we’re getting the best value for our dollar. He stated when he campaigned last year he did not campaign on reducing tax dollars but ran on efficient government spending because he did not believe that pledging to reduce tax dollars was a responsible move for a politician to make unless they had all the facts and thinks getting facts every day in this job. He stated this is not a debate at this time but would like a thoughtful discussion as we move forward and opened the meeting for discussion.
Council Member Lunak thanked everybody for sending the flowers, cards, balloons and phone calls, etc. that it made his stay a lot easier and quicker. He stated working on the budget together is good but have to remember that after reading the paper today that some of the council members think it us against them, but all have the same goal in mind and especially for the citizens of the city is to do a good reasonable budget which takes a lot of hard work and early enough in the process to compromise or figure out better situations and problems we’re going to face during the process.
Council Member Burke questioned making of Wednesday meetings as special city council meetings rather than committee of the whole meetings; Mayor Brown stated yes. Mr. Burke suggested that we have the standing Wednesday meetings until we’re done with the budget and not bother with the budget on the Monday night meetings, can take care of regular business on Monday nights and reserve Monday
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for the introduction and the final passage but have special Wednesday meetings for the budget when we
can concentrate on that.
The city auditor reported there is a listing on the council member’s desks a listing of recommended changes to the mayor’s 2002 preliminary budget of the General Fund. also a summary of where it’s at and will review those in detail. He stated they also have an updated change in cash balance, General Fund line item that has changed; also budget request area and those General Fund areas that he states in the changes will be reflected there and also have detailed work sheets. He stated this is a document in progress as they move through it, will be suggesting changes as review and see on monthly basis until come to final completion. He noted the changes that were being recommended in the mayor’s budget in the General Fund are:
1) a decrease of overtime in the police budget by $70,000 - this amount can be associated with special events and have recommended $160,000 for funding of those special services that they can’t recover for police traffic control, fire people, etc. and that is already covered.
2) increase revenue for court levied fines - reviewed and find can increase by $30,000 based on current revenue stream;
3) increase of revenue for parking fines by $30,000
4) under wage slippage in General Fund, generally spend about 95% of the wage category due to unfilled or under filled positions and have increased that from $450,000 to $550,000.
5) the Mayor has reduced out of his budget $50,000 for Air Force Base and Military Retention - that we do have money in cash carryover to the amount of $137,000 that is usable for that plus we would fully expect and know if things started to happen at the Air Base, more closure rounds, etc. there are other funding sources that would ask council to use to retain the Air Base.
6) change Miscellaneous contingencies to $125,000 - a decrease of $50,000.
7) increase wages for Engineering budget of $2,500 - project engineer I will be moving to a project engineer II
8) Health Department - decrease permanent wages from $42,875 to $26,620.
He stated there are some changes that are not included in this and will need to be discussed and that item will be going to the city council on Monday - wage increase package of approx. $397,000. He stated he had distributed a corrected copy of COLA adjustment which has a total of $420,906 rather than the $397,000. He stated impact as current status of the General Fund - that present revenues for the General Fund are projected to be, and includes the additional $600,000 from Highway Users Funds over last years, is $18,413,630 and General Fund expenditures, including changes to the budget, are $18,096,577. He stated he added the dollar amount for the wage agreement, if approved, so would know total cost they are looking at is, total expenses is $18,517,483 or we have more expenditures then over revenue or deficit factor of $103,853. He stated in discussion with the Mayor in order to balance this there is the additional recommendation that we would eliminate the fire marshal for this year as suggested but recommend that would be considered in the future and also the change of 3 firefighter IIs to firefighter IIIs, which is an amount of $65,000 and leaves deficit of $38,423. Mayor Brown stated he thought they were going to keep the change of firefighter IIs to IIIs. The city auditor stated that would an $11,000 difference, then $49,000 short at this time. He stated there was discussion as an opportunity in trying to maintain the zero mill increase, that may not have to do this, but is a way to do it - per NDCC the council can by making a finding that there is sufficient cash balance in an Enterprise Fund, then authorize a transfer up to 20% of the current year’s revenue to the General Fund. He stated if we remain at the $49,000 deficit, may look at or request that you do that, taking the money out of the Waterworks Fund where there is a $7.4 million balance - do this with the intention of getting through one more year in understanding of the flood
recovery and trying to get people through that period and realizing that some of these transfers are one time things and look at in the future.
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There was general discussion by the city council.
Council Member Lunak asked if increased wages for engineering budget - $2500 - asked if Engineer I and II were involved in the retention that was done several years ago, that once they received the retention payment that there wouldn’t be any more increases in that large a scale. Mr. Grasser stated that the engineering positions still have the 8% retainage and has been rolled into the budget and doesn’t come out of the dollars set aside for retention for 2001 or 2001 and are built into the salaries. The city auditor stated when they went through council those were retention dollars but they are on-going dollars and are shown on paycheck by two line items - base pay based on grade and step and then additional line item showing retention dollar amount per hour and is included in their overall pay but not part of the classification pay. He stated it’s considered part of their base salary to recruit for the positions, that they can’t recruit at the base pay because don’t get any applicants. Council Member Lunak stated he doesn’t remember when voting for the increase for the 8 people for the retention monies, they were supposed to be evaluated every year for the money, but now since built into their wage, they are getting double pay and if that was the way the program was to be, doesn’t know if they would have voted that in. Council Member Christensen stated the observation is correct and no one disputing that.
Mayor Brown stated they will be presenting the budget Monday so that it can be discussed at future special city council meetings - plan is to present it at one meeting and at next meeting would have amendments to the budget, but nothing finalized until the end.
It was noted that that the position and the office for the administrative coordinator are fully funded in this budget - it was noted that a portion of the salary is allocated as attributable expenditures to utility funds, etc.
Council Member Bjerke questioned amount of 1% sales tax for the year 2000 and projected amount for 2001 - total amount (additional $300,000 in property taxes and $500,000 in sales tax). The city auditor reported he would get that figure for him later but approx. at $5.5 million and will be over and above that.
Mr. Bjerke stated he wanted citizens to know how much additional revenue this city is taking in and those numbers will provide that; and reminded council there is a potential to use CDBG money for expenditures that could reduce the expenditures on the General Fund, need to evaluate some positions in the city and asked for a listing of all the temporary employees to the council members (will be done).
Mr. Hanson stated in response to using CDBG funds to fund General Fund items - any expenditure the City wishes to make could be looked at using CDBG funds but cautioned on two things: 1) there are only three areas those funds can be used, has to benefit low and moderate income people or used for the elimination of slum and blight or used in case of an urgent need - only one urgent need in 1997 and during that period of time did not utilize our Entitlement funds for urgent need other than the current year are using the National Objective of Urgent Need for the disposition of the lots to be acquired after the flood and that is through special approval from HUD in Washington, DC - for slum and blight have to be eliminating a slum and blighted area that includes structures - for benefiting LMI individuals and 70% of all CDBG funds must address LMI eligibility, have number of areas to direct funds to: primary ones are area benefit, direct benefit - would have to be large city with small area within city which is benefited solely by that equipment and doesn’t believe have that situation in Grand Forks. He stated he would offer himself and staff to review any suggestions that council members have of utilizing CDBG funds for
General Fund or any other expenditure of the city, but please give them the opportunity to review it and make sure they are looking at it correctly to meet the LMI benefits or other national objectives.
Council Member Lunak stated that in about two weeks he would be coming in with the overtime proposal
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Council Member Burke stated there are a number of non-general funds that are supported in whole or part by property taxes - Planning and Zoning, and asked why segregate different items out of the General Fund - that we pay all the taxes and concerned about the gross number that we’re involved in levying. The city auditor reported that the State Statures sets up specific mill levies for those specific special revenue funds and are segregated because when levy that mill, can only use it for that purpose. Council Member Burke asked if we could choose to fund some of those items out of the General Fund (noted it would be at their discretion) - and would like to consider.
It was noted that the City Hall guard is in budget for next year.
The question was raised for COPS in Schools ($77,000) because there were discussions with the School District to see if they would pick up some, if not all, of that - The city auditor stated there are discussions going on with the School District and they appear receptive to pick that up when the grant money is not available - grant through 2002.
Council Member Bjerke questioned policy on cash carryover - The city auditor stated they are continuing former practice of carrying over Maint. & Operations and Capital & Betterment and allowing departments to use for capital items or critical needs that might come up. Council Member Bjerke stated he would like to see us having a Contingency budget, eliminate cash carryover, and if need something budget for it. - have lot of accounts with a lot of surplus and condense some of that. Council Member Hamerlik stated some of the council members were on the council when carryover policy was adopted - that personnel dollars not carried over - and the reason why allowed other dollars to be carried over was that they expected the department heads to be prudent, conservative - tried to let them carry over money so they don’t spend in a manner to get rid of it - and allowed them to carry over dollars and use in a prudent way in the following year. Council Member Glassheim stated it allows staff to manage the flow of money in the department on a greater than annual basis - internal planning. After further discussion it was noted that when a department head wishes to use carryover funds must come to council - when want to use that pool of funds have to come for budget amendment - and council does have oversight.
The matter of Highway Users Fund - the city auditor stated they were comfortable with half million for 2001 as an on-going transfer to General Fund to cover street department costs - for 2002 important to look at a one-time shot or over next few years wean ourselves off that dollar amount - that this policy and have used Hwy. funds to match against federal funds to do major street repairs - we have not done some of the projects budgeted so can do this for 2002 and not going to be done at this point - carrying over about $3.8 million in that account this year - and by doing the $600,000 we spend it down to $3.2 million at end of 2002 - don’t want to continue that because have budgeted out in the future - 2003-04-05 some larger capital items in the CIP.
Mr. Grasser reported there are 4 - 5 federal programs and depending upon street classifications different percentage matches and some of the streets (Gateway/Washington St.) where use 80% federal, 10% State, and 10% City (local) and comes out of the Highway Users account to match - collector type streets use 80% federal and 20% local (and half of local match special assessed and half out of Hwy. Users). He stated they also pay for bikepaths match out of Hwy. Users, traffic signals and those projects have not been special assessed and matching money comes out of Hwy. Users. In addition out of Hwy. Users we also do general street repair, emergency street repair, cost matching programs for street maintenance,
street rehab and reconstruction to local citizenry on local streets with different percentages. He stated he has tried to put out a program to try to alleviate some of the special assessment issues that come up with building classified type streets and programs they could develop of which Hwy. Users would be key component to help eliminate those types or reduce those types of special assessments (ie., 42nd Street), that on collector streets there’s 20% match with 10% special assessed - and should consider try to take
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care of the 10% match - may be opportunities to explore but if revenue streams aren’t there doesn’t pay to go very far down that path, and should be short-term thing.
Council Member Burke stated it would be helpful esp. in General Fund but in all, if there was a table of contents with regard to departments and sub-departments. He also asked for written policy on reimbursed wages, how allocated and what portions of departments wages are allocated to reimbursed wages and how percentages have changed over the past four years. These will be done.
It was noted that the $65,000 for civic auditorium is for maintenance - and could be available depending on what happens to that building.
There were no additional comments.
ADJOURN
It was moved by Council Member Hamerlik and seconded by Council Member Kreun that we do now adjourn. Carried 11 votes affirmative.
Respectfully submitted,
John M. Schmisek
City Auditor