HomeMy WebLinkAbout04/06/2009 Work Session
City of Springfield
Work Session Meeting
MINUTES OF THE WORK SESSION MEETING OF
THE SPRINGFIELD CITY COUNCIL HELD
MONDAY, APRIL 6, 2009
The City of Springfield Council met in a work session in the Library Meeting Room, 225 Fifth
Street, Springfield, Oregon, on Monday, April 6, 2009 at 5:39 p.m., with Council President
Ralston presiding.
ATTENDANCE
Present were Councilors Lundberg, Wylie, Leezer, Ralston, Woodrow and Pishioneri. Also
present were City Manager Gino Grimaldi, Assistant City Manager Jeff Towery, City Attorney
Joe Leahy, City Recorder Amy Sowa and members of the staff.
Mayor Leiken was absent (excused).
I. Pre-Budget Discussion.
City Manager Gino Grimaldi introduced this item to the Council. He said this was a preview of
the budget that would be presented to the Budget Committee in a few weeks. Staff would like
Council to indicate whether or not they were comfortable with where the numbers ended this
COIning year and in FY II. If Council was not comfortable, staff would go back and make further
reductions and provide additional alternatives for the Budget Committee to consider. Staff would
show Council what they had done and why in the current budget.
Mr. Grimaldi said this budget was unique in the number of positions proposed to cut. In the past,
when they had a weakness in one fund, they had strength in another fund to move things around.
That was not an option at this time. Overall, there was more stress in the total budget. The good
news was that inflation was low, but they needed to be cautious as inflation could rarrip up.
Budget Officer Bob Brew said he was sitting in for Finance Director Bob Duey this evening. On
April 21, the Budget Committee would hold their fIrst meeting. Many of the things the Budget
Committee would be seeing in FY20 I 0 were started in FY2009. Staff felt it was important to
explain what was done this year to address some of the issues with the economic downturn. The
City was required to provide a budget that was balanced to the Budget Committee and then City
Council. The rapid change in the economy caused the City to take a look at current budget
assumptions last fall. The Executive Team met in December to discuss how to proceed. He
explained the issues that brought Springfield to the current situation, including a low beginning
balance, lower than anticipated revenues and higher than expected expenses.
Mr. Brew said they were expecting a slight increase in revenue, but would be trying to recover
from the drop this year. It was not until the tax rolls came from the County in October that staff
saw the impact to our budget, especially with the Weyerhaeuser re-evaluation. They immediately
looked at ways to get this year's budget balanced. He noted some of the challenges in putting
together a budget in advance of when it would start and far in advance of when it would end.
Staff spent a full day going over the budget. From that meeting, staff determined that departments
needed to reduce their General Fund budgets by 4% in the current year, with 2% of that as
ongoing expenses. For the coming fiscal year, each department needed to find another 4% in
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Council Work Session Minutes
April 6, 2009
Page 2
reductions. Department directors and their staff worked hard to get those figures. Staff identified
twenty-two positions that were vacant or soon to be vacant, and decided to hold those positions
this year and next. An additional four positions were cut by laying off employees.
Mr. Brew said departments looked at their workload during the current economic times, and their
priority of services and strategic planning to determine reductions. He noted that two union
contracts were currently in place that continued through FYIO, the International Association of
Fire Fighters (IAFF) and the Springfield Police Association (SPA). Both contracts had their cost
of living adjustment (COLA) already in their contracts. The two remaining unions, the Oregon
Public Employees Union (OPED) and the American Federation of State, County, Municipal
Employees (AFSCME) had a contract expiring June 30, 2009. When staff built the budget for
FYIO, they built it with a zero COLA for OPEU, AFSCME and the non represented employees.
Mr. Brew said of the 22 positions held vacant, 3 were police officers. Chief Smith offered the
positions as part of his reductions, although staff was reluctant to do so. A couple of weeks later,
Senior Management Analyst Mike Harman called to say there was a stimulus package grant
available for police officers to be reinstated that had been cut for budgetary reasons. At this time,
those three positions would not be funded in the current budget, and the City would apply for that
grant. That would be a decision point for the Budget Committee.
Mr. Brew said between the adopted budget for FY09 and the proposed budget for FYI 0, they
projected a 2.4% decrease in real dollars, including some fairly significant one time expenses
from FY09. In looking out into future years, staff remained conservative with revenue and
expense projections, as they were unsure ofthe economy.
Mr. Brew said there were several issues for the Council and Budget Committee to think about.
I. What to do if the stimulus funds were not available to fund the Police officers, and what type
of provisions to make in three years if the grant funds were received.
2. The ambulance fund estimated about $500,000 less in revenue than expenses, even with the
proposed rate increase. The General Fund would be providing a $500,000 subsidy to that
fund this year. Council would need to decide ifthat would continue or if other decisions
needed to be made.
3. The City had identified two fIre stations that needed to be relocated, but there were no funds
to do that at this time
4. The jail would be opening in 2010. There was a property tax levy through FYI3, but Council
would need to look at how to fund that in subsequent years.
5. In prior years, the City had been able to move expenses from such funds as the street fund
and ambulance fund. Also, the Booth Kelly and Bancroft funds had been a reliable source of
revenue, but those balances were getting significantly low. They would need to look at how
they could replace those revenue sources.
6. If the economy didn't improve, they needed to look at deeper cuts next year. When the
economy turned around, the City couldn't ramp up as quickly as the private sector. That
needed to be taken into consideration.
Mr. Brew referred to Attachment B in the agenda packet and discussed the FY08 actuals, the
FY09 adopted, the FY09 adjusted and the FY09 actuals. He referred to Attachment C in the
agenda packet, which showed the General Fund three year cash flow projections and the current
draft status ofFYIO budget preparation. He explained the figures on the chart. Staff felt
comfortable with the figures presented.
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Council Work Session Minutes
April 6, 2009
Page 3
Mr. Grimaldi discussed the deficit of$355,000 in the FYIO budget. If those figures stayed in the
deficit, staff would make adjustments mid-year to address that if needed. He referred to the
priority of services that were included in the agenda packet as Attachment D. Staff looked at
those and did not reduce those at this time. They could look further at those if Council directed.
Mr. Brew said the positions that had been eliminated didn't necessarily tie in to the priority of
services. Most were in development services and public works and related to planning and
development. They had attempted to minimize the service impacts to citizens.
Councilor Pishioneri asked about the COPS grant funds.
Mr. Grimaldi said the funds were available. The deadline to submit the application was April 16.
Police Chief Smith said it was a three year package. The revenue available was entry level plus
salary and benefits for three years. There was anticipated growth over those three years included
in the funding.
Councilor Pishioneri said there could be a certain amount of attrition over those three years, and
the department could leave some of those positions vacant unless additional funding came
through after three years. He asked if there could be money savings if the opening of the jail was
delayed.
Chief Smith said they were in the process of hiring for the jail now because June 8 was the next
academy. The State was going on a 30% reduction, which would translate into 5 classes over the
next biennium. They wanted to get those without experience on board by June for that reason. For
those with experience, they would come on board in August.
Councilor Pishioneri suggested delaying hiring those that were not certified, and opening the jail
with those that were certified. It could be a potential cost savings by not having to pay for
training.
Mr. Brew said he understood t4e academy was only available so often. The other question was
whether or not just a portion of the jail could be opened with less than full staffing.
Chief Smith said they had offered jobs with date certain to half the staff. Those that were already
certified were looking for jobs and delaying their start date even to August could affect the ability
to hire those people with experience.
Councilor Pishioneri agreed and said if we had people that were certified, we could hire them on
now. Similar COPS grants were being considered by other agencies, so that pool could disappear
rather quickly.
Chief Smith said they did not have enough certified people to open the facility now.
Councilor Pishioneri said he would like to see what options there could be in delaying the
opening of the jail, the financial impacts, and if it would be practical.
Mr. Grimaldi said they could bring that back.
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Council Work Session Minutes
April 6, 2009
Page 4
Councilor Pishioneri discussed the transient room tax and noted that Lane County Parks was
asking for more of those funds. There were four cities (Eugene, Springfield, Cottage Grove and
Florence) that had applied for the 5% TRT money, and now other cities may apply for it as well,
reducing the amount each city received. Also, ifthe County Parks received their $400,000 before
the cities could get their percentage, that amount would also decrease.
Mr. Brew said the City had its own transient room tax separate from the County's. The revenue
from that tax was down about 40%.
Councilor Pishioneri discussed the potential $500,000 gap in the ambulance fund, which would
come out of the General Fund. He asked if that gap could be filled if they eliminated the reserve
ambulance crew.
Mr. Grimaldi said that was one of the things staff looked at and would be presenting to the
Budget Committee.
Councilor Pishioneri referred to Attachment C and asked for clarity of the difference in the
shortfall in FY09 and FYIO.
Mr. Brew said the $355,000 was operating revenue versus operating expenditures. He pointed out
the cash reserves and explained those figures and how they balanced that figure. .
Mr. Grimaldi said there was also an increase in dedicated contingency and working capital.
Councilor Pishioneri said he would like the City to put all the new and relocated fIre stations on
the back burner. He asked about the current cost of Fire Station 16.
Mr. Grimaldi said they were within budget.
Councilor Woodrow asked about opening the jail later and how that might impact the levy. He
would like to look at the impact of the annual wage increase of the two unions and look to see if
there was some way to negotiate postponing negotiations for a year or two, with the potential of
backfilling after revenues increase.
Mr. Grimaldi said he would like to give that serious consideration and schedule an Executive
Session to discuss that issue.
Councilor Woodrow asked how badly the proposed cuts would affect the departments, and if
there was room to cut more. He had a concern of taking funds from reserves for a number of
years. As bad as the recession had hit everyone, they needed to look to see how we could be as
efficient as possible. They needed to see if that was realistic.
Mr. Grimaldi said there were a couple of ways to approach that. The fIrst would be for Council to
ask staff to provide the next amount of reductions. The second would be to use the priority of
services. Staff could focus on the impacts to the departments during the Budget Committee
deliberations.
Councilor Woodrow said the fIrst idea was great. Council needed to know the answers.
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Council Work Session Minutes
April 6, 2009
Page 5
Mr. Grimaldi asked for a suggested number of reductions.
Councilor Woodrow suggested the shortfall of $300,000-$500,000. They needed to be realistic
and perhaps looking at the upcoming contracts could be enough. He would also like to see ifthere
was anything that could be postponed until next year, other than the jail. He had a marked list that
he could provide to staff.
Mr. Grimaldi asked for an example.
Councilor Woodrow said there were a couple of things under Human Resources ("Manage the
City-wide training and development program. . .") They would be more service reductions.
Mr. Brew said when putting a budget together, they figured each position was filled every day of
that year. Sometimes vacancies occurred and there was no need to use reserves.
Councilor Lundberg asked what happened to cause additional expenses for the AIRS program.
Mr. Grimaldi said AIRS was mistakenly omitted from the budget by staff, then put back in. There
was a meeting today regarding AIRS. The project completion time was moved up. The workplan
to do that also allowed them to move ahead on other projects to make police more efficient
regarding report writing. There was a much better system in place now to monitor our progress.
Councilor Lundberg asked if all the SDCs were at their full rates in the proposed budget.
Mr. Grimaldi said that would impact the capital budget, not the General Fund.
Councilor Lundberg asked about a possible wage freeze or taking days off without pay. She
wanted to look at ways to address the reductions without cutting positions. She would like to see
whatever could be done.
Mr. Grimaldi said staff could provide a list of the dollar impact of some of those things and a list
of what staff had already done. That should give Council options to consider.
Councilor Lundberg referred to page 5 of 6 in the list of priorities regarding business licenses.
She felt we should settle on something more efficient and effective than our current 20 variations
for business licenses.
Mr. Grimaldi said it was confusing for the public and many thought we had a license for every
business. It was a significant problem. If they would like a discussion on business licenses, that
should occur outside the budget discussion. If done correctly, it was a service to the community.
Councilor Leezer asked if they did any job sharing.
Not at this time.
Mr. Brew said once an employee got to a certain number of hours, it was more expensive to hire
two part time employees than one full time employee.
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Council Work Session Minutes
April 6, 2009
Page 6
Mr. Grimaldi said they were discussing the possibility of offering a voluntary furlough where an
employee went into a part time arrangement. That could be combined with two people going part
time.
Councilor Pishioneri wanted to discuss furlough options at all levels and with all groups, whether
or not it was possible and to what extend it made sense. He would like to see how reductions in
State services would affect the City. He asked what percentage of the total budget the $300,000
equaled.
Mr. Brew said it was less than 1.5% of the General Fund.
Councilor Pishioneri suggested staff start cutting more aggressively by perhaps 2% or 4% in
anticipation of future shortfalls.
Councilor Wylie said the revenue forecast for the State would be out on May 25. They were
projecting a$4B-$5B shortfalL Those cuts were going to impact our communities and ambulance
services. Stimulus funds were available. On the positive side, there were statistics coming from
the Florence community where they recently opened an 18 bed jail. They had a substantial drop
in crime. That could also be a positive impact in our community when our jail opened.
Councilor Woodrow asked if City employees received State unemployment when laid off. Yes.
B:e asked if staff was aware of the Work Share Program. He explained that a program could be set
up where employees were laid off 20% of their hours, they could collect 20% of unemployment.
It could be adjusted from 20% to 40%.
Councilor Ralston said he didn't like taking from reserves, but he did like the idea of looking at a
wage freeze or whatever it took to reduce personnel costs. Consideration should be made when
opening the jail to open more beds earlier. Part of the reason Council did the priority of services
list was to look at what was at the bottom of the list. He would like to start at the bottom of the
list to determine what the costs were and what could be cut. Council was going to have to make
some tough decisions.
7. Regional Wastewater and Local Stormwater User Fees for Fiscal Year 09110.
Environmental Services Supervisor Tim Schuck presented the staff report on this item. User fees
for regional wastewater and for local stormwater were last reviewed by the City Council in
December of2008. Staff is in the process of developing Fiscal Year (FY) 09-10 local user fee
options for consideration by Council later this spring. The Metropolitan Wastewater Management
Commission (MWMC) will approve a schedule ofFY 09-10 regional wastewater user charges on
April 10th and will be forwarding them to Springfield and Eugene for implementation.
Each year, staff brings Council proposed user fees for localstormwater programs. These fees are
established to provide adequate revenue to fund operations and maintenance, capital improvement
programs, and cover the debt service payments for the City of Springfield. In addition to these local
fees, MWMC develops regional user fees to support the Regional Wastewater Program.
Regional Wastewater User Fees. At the March MWMC meeting, staff presented options to
increase regional wastewater user fees from 12% to 18%. MWMC may adopt a fate increase for
the user fees following a public hearing on April lOth and forward the FY 09-10 fees to Eugene
and Springfield for implementation. The primary factor driving regional wastewater user fee
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Council Work Session Minutes
April 6, 2009
Page 7
increases is the Commission's capital financing plan associated with construction of the 2004
MWMC Facilities Plan projects. The twenty-year capital projects pian is intended to provide
environmental compliance and treatment capacity to serve community growth through 2025, at an
estimated cost of$196 million (in 2006 dollars).
Local Wastewater. The primary factor driving the need for increased wastewater fees in FY 09-
10 and subsequent years relates to the funding requirements of the local wastewater Capital
Improvement Plan (CIP). Staff is continuing to explore options involving the timing of capital
wastewater projects which could result in lower user rate increases. Because statr is continuing to
explore options, the scenarios presented in Attachment I should be considered in draft form.
After exploring additional options, staff will present wastewater options at a future Council work
session and seek direction in preparing a schedule of wastewater user fees.
Stormwater User Fees.
Recently, the Stormwater Facilities Master Plan was adopted and fmancing is necessary to fund
these projects. The primary near-term projects relate to restoration of the Mill Race flows and
water quality. Staff has prepared several user fee rate options for Council to consider with
increases ranging from 7% to 21 %. Each scenario requires financing to pay for the stormwater
projects and corresponding revenue bond amounts. Staff anticipates increases in both user fees,
and SDC revenue will be required over the next several years to fund capital programs.
Options for local stormwater user fees are scheduled for review by the City Council at a work
session on April 6th. Following this discussion, a draft schedule of user charges will be developed
for a public hearing scheduled for May 18th.
Mr. Schuck presented a power point presentation on this item. He gave the background of the
storm water, which included Council approval of the updated Stormwater Master Plan in 2003 and
the adoption ofthe new Stormwater Master Plan in 2008. The new plan caused the need to
borrow more funds. He explained the borrowing requirements. There had not been a rate increase
since July 2006 and the system development charges (SDCs) were being updated by the citizen
advisory committee (CAC). SDCs helped to pay the debt service and reduced the impact on users.
The department had also reduced the operating budget in FY09-1 0 in an effort to keep rates from
increasing too much. He referred to a chart showing the residential storm water bill trend.
Mr. Schuck said staff had reviewed the Capital Improvement Program (CIP) and removed
projects at Council's direction. He referred to a chart showing the current projects on the list
which also showed the borrowing options. Another chart showed the residential rates by option.
He explained the stormwater rate options as noted in the presentation. He referred to a chart
showing the residential stormwater rate by City and where Springfield was in that chart. Other
communities were considering rate increases at this time.
Mr. Schuck discussed Regional Wastewater Rates. He provided a regional rate history and
showed a chart ofthe history of the rates from 1997 to 2009. He explained some of the increases
in the past year and situations that caused those increases. He referred to a chart showing the
residential usage trend. He noted some of the challenges the MWMC had faced which would
mean a large amount of borrowing in future years. He referred to the rate scenarios presented to
the MWMC during their March meeting. He explained the options.
City of Springfield
Council Work Session Minutes
April 6, 2009
Page 8
1'.1:r. Schuck discussed the recommendations which included a significant draw down of reserves,
aggressive use of SDCs for debt service, $7.8M in stimulus/SRF monies in FY09-1 0, $20M bond
in FY09-10, and rates driven by 1.25 debt services coverage ratio of bond issuance.
Ms. Schuck said staff would come back to Council on May 18 for a public hearing and rate
adoption. They were seeking direction on which scenario Council would like.
Councilor Woodrow referred to the storm water projects. He asked if the $1 OM bond had been
sent out and what the impact would be of waiting one year to issue that bond.
Mr. Schuck said they would have to cut projects from the project list ifthe bonds were not issued.
Ms. Smith said there was a minimum size of funds that it made sense to borrow. She discussed
funding for the Mill Race and stimulus package and the obligation to match some of those funds.
There were other obligations regarding ancillary stormwater systems.
Councilor Woodrow asked ifHynix still owned the property and paid rates.
Mr. Schuck said they did, but the amount they paid was very low. He explained.
Ms. Smith said Springfield didn't get wastewater or stormwater fees from Hynix because it was
in Eugene.
Councilor Woodrow asked if it impacted the regional increase.
Ms. Smith said it did affect the regional rates and that change was adjusted in the interim.
Mr. Schuck said the fees Hynix would pay were reduced because they were not operating.
Councilor Woodrow said he had continually heard that Springfield paid higher fees than Eugene
because of the economy of scale. He asked for clarification.
Ms. Smith said in the regional system, Springfield and Eugene paid the same. On the local side,
Eugene was denser with more people per mile of pipe, which affected the economy of scale. That
was only one factor. Others included debt, participation of each City in private development, and
other factors. Economy of scale was a minor factor. Eugene did have more high rises and greater
density on their system. The regional rates were equal as far as the rate per unit. It was based on
flow and strength.
Mr. Grimaldi said staff did need some direction regarding the storm water rates.
Councilor Ralston asked if Option 2 would capture Jasper Natron and if $7M would cover the
optimal borrowing amount. Yes. Op~ion 2 seemed to be the prudent thing to do.
Councilor Lundberg said she agreed. She didn't want any increase, but felt Option 2 was the best
choice at this time.
Councilor Woodrow asked about the 59th and Aster project.
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Council Work Session Minutes
April 6, 2009
Page 9
Mr. Paschall said this was fixing a drainage problem downstream from a pipe that outfalls the
wetlands on some property owned by Weyerhaeuser. He explained.
Councilor Woodrow agreed with Option 2.
Councilor Pishioneri asked about the need to proceed with Jasper Natron.
Mr. Grimaldi said the City was investing in infrastructure so they could be prepared to address
quickly when opportunities arise.
Ms. Smith said Jasper Natron had been developing in a piecemeal fashion, and there were a lot of
wetlands and natural drainage in that area. Development had caused some significant problems in
some areas. Last year Council approved an increment for enough funding to allow some
flexibility for a higher level of development. This project would provide that flexibility.
ADJOURNMENT
The meeting was adjourned 6:59 p.m.
Minutes Recorder - Amy Sowa
Attest:
~~
Amy Sow
City Recor er