HomeMy WebLinkAbout04/01/2002 Work Session
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MINUTES OF THE WORK SESSION
OF THE SPRINGFIELD CITY COUNCIL
HELD ON MONDAY, APRIL 1,2002
The Springfield City Council met in work session at Springfield City Hall, 225 Fifth Street,
Springfield, Jesse Maine Meeting Room, on Monday, April I, 2002, at 6:00 p.m., with Mayor
Leiken presiding.
ATTENDANCE
Present were, Mayor Leiken and Councilors, Fitch, Hatfield, Lundberg, Ralston and Simmons.
Councilor Ballew was absent (excused). Also present were City Manager Mike Kelly, Assistant
City Manager Gino Grimaldi, City Attorney Tim Harolc:l:, City Recorder Kim Krebs, and members
of staff.
I. 10- Year Outlook for Growth in Services.
Mayor Leiken opened the meeting and said as council recalls from the Council Goal Setting
session Councilor Hatfield suggested, and the council concurred that we begin looking at a 10-
Year Outlook for growth in services. He said Finance Director Bob Duey would be providing a
brief overview, Councilor Hatfield would be making some opening comments, and at that time he
would open up for council discussion.
Mr. Duey said at the goal setting work session of the council, in addition to adopting its five-year
goals, the council was provided with preliminary information regarding the City's 10-year
financial forecast. He said the numbers do not have a lot of liability when looking at the 10-year
picture. He said Councilor Hatfield suggested staff prepare information that would allow council
to review this from a different perspective.
Mr. Duey said they would be bringing various issues to the council to see where we want to go in
the short term and in the long term. Most cities are seeing the tax limitation measures now
having an effect and their operating budgets are not keeping pace with the revenues. He said we
are fortunate because our property taxes have increased over the past 2-3 years so we are
currently outpacing the norm. He said, however, if this trend slows down we will be facing more
extreme financial difficulties. Our revenues will not be able to keep pace due to the fact that
expenditures are rising between 5 V2 and 6 percent a year. The city is about a million dollars short
from one year to the next. In preparing the FY 02-03 and FY 03-04 budgets the city is looking to
council to provide direction on where they would like to see services in 10 years. He said we are
looking at possible revenues, priority of services and legislative policy changes.
Councilor Hatfield said that if things stay the same, we would have to cut nearly one million
dollars each year. He would like to see the council work together over the next 9 months to
develop a work program which includes services, legislative changes, economies within our
existing resources and if necessary other resources. By doing so, he would hope that in at least ten
years the budget would be balanced with sustainable services at an acceptable level of public
service to the taxpayer.
Councilor Hatfield outlined the three steps he feels are necessary to begin developing this work
program.
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Phase I (complete by July or Council Recess) - Establish acceptable levels of
serviceslbenchmarks. Begin with the serviceslbenchmarking data to determine what services we
should be providing, and how well we should be doing it.
Phase 2 (complete in the fall) - Provide information as to what it costs to provide/deliver services.
Determine what legislative issues need to be resolved in order to allow us to provide our services
in a more efficient and effective manner. Staff can provide information on those legislative
Issues.
Phase 3 (complete by end of year) - Try to identify the funding gaps as well as appropriate
revenue resources. Continue to work on the legislative issues. Implement a plan that can put us
on a sustainable and sound fmancial footing for the upcoming years' budgets. Resolve any long-
term issues as well.
Councilor Hatfield circulated results of a major study performed by the League of Oregon Cities
(LOC) on the state of municipal finance in Oregon. He said only 22% of the cities surveyed feel
their financial situation is better than last year. He said well over 50% ofthe cities are seeing
significant deterioration in their financial position. LOC will be trying to resolve legislative
issues during the 03 legislative session.
Councilor Ralston asked if the 22% of those cities that feel they are financially sound have been
asked what they are doing or implementing to feel that way? He also asked if the numbers
included in Mr. Duey's packet took into account the future development that is planned in the
Gateway Area.
Councilor Hatfield said he would be attending the LOC board meeting next Monday, and that is
one issue that will be discussed. He said he believes the reason will probably be economic
development.
Mr. Duey said projections right now are 1.5 - 2% over the 3% assessed valuation growth,
however if we recruit large companies every two or three years i.e. Sony, WalMart, those
projections could go higher.
Councilor Lundberg said that the Gateway area was originally built out as medium density and
now that is changing. Mr. Duey said those changes would be beneficial, and said those were not
factors in his report.
Councilor Hatfield said one of the tools for revenue sources is economic development. He said
with economic development you get tax value. He said if it is commercial industrial it pays more
in taxes than it consumes in resources so there is a net benefit to the general fund, and if you're
generating good jobs, good wages and good benefits the only downside is that we may have
additional traffic problems. He would rather face that problem rather than high unemployment,
domestic violence and other social pathologies that happen when you have a poor economy.
Councilor Simmons said it is obvious that the 22% are fantasizing about their revenue versus
cost. Even with the best scenario of full build out of Gateway, you are still going to see costs
greater than the net revenue as you increase the population base. All those costs will still drive
you to work diligently to meet the needs of this community. Planning ahead is a valid step, but
the 22% are not really looking at the actual facts of growth.
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Mayor Leiken said over the years, one ofthe cities that we have seen that has been able to
continue to grow is Hillsboro. He doesn't want to hold them up as a model because they have
their own challenges, but they may be one of the 22% showing growth most likely because of
Intel moving in and employing 12,000 people. As we progress through Ballot Measures 47 and
50, even if we were to recruit and site 2 more Symantec's, where would we be in year 10 - 15?
Mr. Duey said using Symantec as an example, their tax revenue following the enterprise zone in
3-5 years is around 20 thousand. He said that would be the type of base we are looking for. It
would take something similar to that year after year to make a real difference.
Councilor Lundberg said there needs to be a balance of businesses brought in and housing for the
people. Affordable housing is a key, because if they can't afford to live here, we may just have
an employment base. What services are we going to provide and at what level?
Councilor Hatfield said economic development is a strategy, and it is one of many. Can we be
more effective with the legislative money we already have or over time are we going to need
another taxing system? He said he isn't committed to the three steps; it just seems to make sense
in the budget process. It is a good idea to look at benchmarks, service levels, and where we want
to be. He said he wants to make sure it is clear that he is requesting that council look at service
levels, and not just service.
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Councilor Hatfield said how can we make the cost structure more efficient and more effective,
what legislative issues can make it so, and lastly look at the revenue side. We need to ask
ourselves; can we afford the service levels we ask for? If not, we may need to adjust the cost side
again or figure out how we can get the funding to meet those service needs.
Councilor Fitch said this is tough; we have gone through BM 47 and 50. The city has done a
good job in making cuts. State Representative Terry Beyer reminded her of a study that had been
done showing the priority of services and looking at that. Councilor Fitch said it might be time to
look at that study again. Whether you are a public entity or private entity, your number one c9st is
people. The city has done a good job with providing service with a reduced staff. She said the
truth is, we are past the Band-Aid point where we have to really look and say, ok what do we
keep? The private citizens are up to their necks with new taxes. Actually figuring out what to do
is difficult. She said we need to go beyond the services we are providing, beyond looking at
legislative mandates, and find out what other things we are doing i.e. 4-d rule. How much staff
time is spent attending meetings to keep up with the legislative mandates? She said we have
talked about going from a one year to 2-year budget cycle. A lot oftime is spent in preparing the
budget. We need to be able to have some money that can float to address the hot spots that may
come up. Costs are not going to go down. She talked about insurance coverage and the increased
cost for coverage. She said she is glad we are looking at this in a step process. She thinks
working on this now might alleviate the need to do it every year from this point forward.
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Councilor Simmons said there are a lot of things we can do in terms of health care costs. We can
look at trying to fight the insurance industry or look at where they have rules and regulations that
can help us manage our costs. If that drives our people costs, those are some of the legislative
issues to look at in order to hopefully chip away at the personnel costs. He said when we begin
talking about the economic development component; the Chamber of Commerce states that 99%
of our job growth is going to come from small to moderate existing businesses. We need to start
to focus on existing local businesses, to put time and energy into them. What can the city do and
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what can these businesses do for themselves better than we can? How can we facilitate the
economic stability through internal sustainable growth?
Councilor Hatfield said this is going to be an extremely difficult time if we have to go through
each budget year of shaving. This is his thought as a possible solution.
Councilor Hatfield said he would like to see the fIrst step by July, a plan of services we will
provide, and an idea of adequate service levels, in order to answer the fundamental question, what
are we doing and how are we doing it.
Councilor Fitch said our staff is a valuable resource and could probably provide the council with
some good ideas.
Councilor Lundberg said the piece we haven't had in a work session is clarification ofthe
benchmarking management system. (She mentioned the communication packet.) What are we
trying to accomplish? She said the components that are occurring are in that document, and
should be reviewed by council. Staff can then identify some of the things that we are trying to
accomplish. What are we expecting city staffto do? What are we trying to measure? Maybe we
need to re-evaluate that piece.
City Manager Mike Kelly said it is council's choice; staff will begin whenever the council directs
them to. He suggested scheduling a work session for May 20th to review benchmarks.
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Councilor Hatfield said if we could get the benchmarking and service levels pretty well
determined by summer recess, council could then work through the end of October and begin
taking advantage of what the staff is doing already in the '03-'04 budget. Council could then start
looking at our service level benchmarks that were established in July and have discussions of the
cost side of the equation. That leaves November and December to look at the resource side. He
said we have next spring to fmalize the action steps, executing the strategy.
Mayor Leiken asked Mr. Kelly if he as City Manager and Mr. Duey as Finance Director, have
some information after talking with the Executive Team members as to what the city can continue
to maintain and what we cannot. What should the city get out of the business of doing? If the
council is going to go through this process, they need to ask what the city does well, and what
areas are done only because they have always been done. The Mayor feels they need this
information in order for council to know how they can begin. If we are looking at a ten-year
process, we need to look at what we do well and put it on the table.
Mr. Kelly said what works best is when the council, budget committee, etc. identify as leaders
where we want to be in five or ten years. It's important to have a candid assessment of what kind
of organization we have now. Define a foundational level, what kind of organization we have
now, what are our strengths and weaknesses, and where do we want to be. That creates a gap of
where we want to be and where we are. Mike said from there you can come up with some
strategies to get from where you are and where you want to be in 2, 5 or 10 years from now.
Mr. Kelly said the tools that we currently have in place will help, for example:
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Springfield Tomorrow - We have asked community members, what do you want for your
preferred future? We have a response from people of what they value and want to see in 10 years
(2010). We have that collective view of what Springfield citizens want to see for Springfield's
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future. We also have census information that is good information because you can actually plot
and project the trend line, demographics, etc. How do we change those trend lines to create the
preferred future instead of the predicted future? There are ways to do that, policies. He said this
issue is not about important services versus valued services. The important thing is to find out
from citizens what is the value of services, and at what level or mix. Why do people move here,
stay here, work here, start a family here, start a business here, etc.
Mr. Kelly said benchmarking is still in the early stages. It is to determine that whatever we do is
based on the importance to the citizens, not just professional managers.
Mr. Kelly said in the end this issue will help staffto know the council's emphasis on where we
want to go in next five or ten years. We can determine whether we want to be more self-reliant
and focus on economic development to grow our way out of our problems or buy things, as we
are able to afford them. Whether we want to selectively enhance certain fee systems, use a ballot
box, support a new statewide taxation system, or lobby against mandates. Should we count on
ourselves by making smart cuts on things that aren't as important to the citizenry? He said what
is helpful, as we make these annual decisions, is that they are consistent with the long-term
vision. As we internally make those changes and cuts, at least it's consistent with methodology
that council has laid out for staff. He said as new councilors and elected officials join the council,
it is important that the goal posts not always change. New councilors come in with their own
skill set and ideas of how to reach the goals, but the plot stays the same. The method in how we
get there may differ depending on the leaders. He is hopeful that we will come up with
something that will guide staff as we make daily and weekly decisions on council's behalf.
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Councilor Hatfield requested copies of the executive summary of Springfield Tomorrow next
week. Councilor Lundberg said she would like to see the presentation that was given by John
Tamulonis at Sony also. It dealt with perception vs. reality of the community. It was a good
layout of information in a power point presentation.
Mr. Kelly said he could also get council members the basic original Springfield Tomorrow
document which is much more extensive.
Councilor Lundberg said we started out looking at services. But what she is hearing from Mr.
Kelly is what do we want the community to be, and then direct services on where we want to be.
She thinks those seem like two different things.
Mr. Kelly said staff would provide information as what are important services and look for
reductions or cuts, new fees, not new fees, ballot box, etc. The staff can assist using those tools.
Councilor Hatfield said as an example, the Police Department does a good job with person
crimes. Where we have a low service level, is car crimes, burglary, etc. We then need to ask
ourselves, do we have too high a service level for person crimes. Do we have too low of a service
level on property crimes? This is the type of item that needs to be reviewed and evaluated.
Councilor Hatfield said the next scheduled work session on benchmarks will be on May 20th.
From that point council could then decide on how they want to proceed with service levels etc. If
council is comfortable with where we are then, we can go into more formalized discussion of
service levels in June and July.
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ADJOURNMENT
The meeting was adjourned at 7:00 p.m.
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Minutes Recorder - Kim Krebs
ATTEST:
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City Recorder