GRANDVIEW CITY COUNCIL

SPECIAL MEETING MINUTES

NOVEMBER 14, 2006

1.         CALL TO ORDER

Mayor Norm Childress called the special meeting to order at 5:30 p.m. in the Council Chambers at City Hall.

Present were:  Mayor Norm Childress and Councilmembers Helen Darr, Bill Flory, Pam Horner, Jan McDonald, Robert Morales, Javier Rodriguez and Joan Souders. 

Staff present were:  City Administrator Scott D. Staples, City Clerk Anita Palacios, City Treasurer John Myers, Parks & Recreation Director Mike Carpenter, Librarian Linda Dunham and Fire Chief Pat Mason.

2.         2007 PRELIMINARY BUDGET

Mayor Childress provided the following overview of the proposed budget for Fiscal Year 2007, to provide city services for the period January 1, 2007 to December 31, 2007.

As in previous years, staff work on the 2007 budget began in mid-summer and required several reviews in order to finish.  The preparation of the budget was assisted by the targets established at the Council retreat in June 2006.  Each year during the budget preparation process, new challenges or circumstances are presented.  It is becoming more and more difficult to maintain the current array of services in the Current Expense Fund at their current level.

2007 BUDGET HIGHLIGHTS

    The proposed budget recommended 2007 expenditures of $4,382,190 in the Current Expense Fund, which represented a 5.8% increase over 2006 projected expenditures.  The projected 12/31/07 Current Expense Fund balance was $577,220.  The 2007 expenditures would be impacted by the policy decisions the Council makes as it relates to the maintenance consolidation study, court consolidation study, and collective bargaining agreements.

    A new document entitled 2006/2007 Budget Summary displayed, over a 24 month period, fund balances, revenues and expenditures for each fund.  The purpose of this document was to provide the Council and the public with a snapshot of the financial conditions of the City over a period of time.

    It was estimated that property tax revenue for 2007 would increase from $1,119,500 to $1,175,000 or 1% plus new construction.  Property tax revenue represented about 10.1% of the total revenues to be collected in 2007 to provide services, and about 28.4% of the Current Expense Fund revenues.  The estimated annual tax payment to the City for a house assessed at $100,000 would be $351 or $29.25 per month. 

    It was estimated that sales tax revenue would increase from $705,000 in 2006 to $719,000 in 2007, or 2%.  Sales tax revenue represented about 4% of the total revenue to be collected in 2007, and about 11.3% of the Current Expense Fund revenue.

The proposed 2007 budget provided full funding for the replacement of vehicles and equipment, except for major fire apparatus.  The following vehicles were identified to be replaced:

    A new Emergency Medical Services Fund was established to completely separate the dedicated EMS property tax levy revenues and expenditures.  This would help provide a more accurate picture of the Current Expense Fund.

    The proposed budget contained funding to support several community programs and/or organizations, including:

         The proposed budget for 2007 did not include the following capital outlay items that were included in the original department requests.  These items were not included in order to close the gap between projected revenue and proposed expenditures in the Current Expense Fund.  The inability to fund these items was a warning signal that current services and service levels could not be sustained with the current reoccurring revenue stream in the Current Expense Fund.

    The proposed budget contained $72,000 for a new police officer position, as a result of the September 2006 policy direction to reinstate a school resource officer position at Grandview Middle School.  $36,000 in projected revenue from the Grandview School District was also included, as part of the cost sharing arrangement.

    As part of the budget process, Department Directors were asked to examine all current rates for fees and charges to determine if adjustments needed to be made.  As a result of reviewing pool fees in the area, the proposed budget included a rate increase for pool fees. 

    In the review of the Public Works Department budget submittal, a number of recommendations were made for modifications to existing services. 

    In 2005, the City Treasurer prepared a six (6) year forecast for revenues and expenditures in the Current Expense Fund.  It also served as a clear warning signal that our existing revenue base could not sustain existing services at their current level over the long term.

    The budget for 2007 was formatted into specific programs within each department.  The purpose of this approach was to identify and segregate services provided by a department into program budgets, to help understand the total costs of each service.  A program statement has been prepared for each separate program budget to provide more detailed information. 

2006/2007 COUNCIL TARGETS

In June 2006, the Council concluded a two-day retreat to develop its targets or objectives for 2006/2007.  Seventeen (17) separate targets were identified and prioritized. 

UTILITY RATES

Utility rate increases would be needed to offset the increasing cost of labor, supplies fuel, and outside utilities.  The base rates listed below were for a typical single family residence.  A water and sewer rate analysis was conducted by Huibregtse, Louman Associates, Inc. in October 2006.

PERSONNEL

The proposed budget provided for 70.465 full-time equivalent employees in 2007.

The proposed budget included dollars for wage adjustments for all city employees.  Adjustments for the 40 unionized employees were subject to the collective bargaining process.  All three (3) agreements expire on 12/31/06.

Annual health insurance costs for medical, dental and vision coverage would increase by 6%, from $760,000 in 2006 to approximately $805,000 in 2007.  We were currently examining ways in which the cost of health care coverage might be reduced, including alternative medical plans and/or a cost sharing arrangement for dependent coverage.  Various options might provide an annual cost savings of approximately $55,000 or more.

A major impact on the proposed budget was the mandated employer costs for the various state retirement systems, of which City employees were members.  This mandate would increase the Citys payroll costs by approximately $40,000.

REVENUE ENHANCEMENTS

As was mentioned earlier, one of Citys challenges was to maintain current services at their current level, particularly in the Current Expense Fund.  Under current state law, cities were quite limited in terms of options available to raise additional general purpose revenue to fund services in the Current Expense Fund.       

The information outlined below was meant to be for information purposes only:

SERVICE DELIVERY ALTERNATIVES

The following were identified as potential service delivery alternatives.  The information identified below was meant to be for information purposes only:

CAPITAL IMPROVEMENT NEEDS

During the process of developing the proposed 2007 budget, a number of unfunded capital improvement projects were identified. 

The greatest challenge in this regard was the areas of major fire apparatus, local transportation infrastructure, parks restrooms, aquatics and parks playground equipment that comply with federal safety and ADA standards.  No financing mechanism was currently in place to make certain that we, as a community, were investing in these areas.  Unfortunately, efforts for legislative remedies in the form of local options have not been successful.

The following areas of major unfunded potential capital needs were identified: Street renovations/reconstruction $7,000,000; Health and safety improvements in parks          $500,000; Major fire apparatus $1,690,000; Aquatics facility $3.5 7 million; and Police station renovation/replacement $Unknown.

RECOMMENDATIONS

• In developing the proposed budget for 2007, many needed replacement capital items were deferred due to lack of available resources.  Many of the items deferred were directly related to service quality.

• As was demonstrated in the budget forecasts, the gap in revenue/expense growth in the Current Expense Fund would make it increasingly challenging and problematic that current services and service levels could be sustained without new revenue sources or revenue growth in existing revenue sources.  In the alternative, serious consideration would need to be given to service reductions.

• The City faces major long-term unfunded liabilities due to the lack of funded plans for transportation, parks and facility infrastructure.  Specifically, this refers to street renovations and/or reconstruction, improvements to major city facilities such as the swimming pool and library, replacement of major fire apparatus and replacement of parks playground equipment and parks restrooms.

• This year, the City initiated an effort with our neighboring cities of Sunnyside and Mabton to identify potential areas for service collaboration.  The City should pursue all opportunities with the other cities and Yakima County for increased service efficiencies.

Following the overview, the Parks & Recreation Director, Librarian and Fire Chief presented their respective budgets.

3.         EXECUTIVE SESSION  - Collective Bargaining

Mayor Childress adjourned the meeting to an executive session at 7:15 p.m. for approximately 60 minutes to discuss collective bargaining with the aforementioned Mayor, Council and City Administrator present.  The special meeting resumed at 9:45 p.m.

4.         ADJOURNMENT

The special meeting adjourned at 8:25 p.m.

__________________________                                __________________________

Mayor Norm Childress                                                Anita Palacios, City Clerk