Meeting Notes
Tuesday, June 27, 2006
Special Budget Meeting
2006-2007 Budget
The special meeting of the Council was held to discuss and approve the 2006-2007 Budget prior to the start of the new fiscal year on July 1st. The full Council was in attendance along with Acting City Manager Graham Hill, Accounting Supervisor Gordon Eton, Public Works Director Jim Hale, audience member Jack Thompson (of the Planning Commission), myself (with two daughters) and there was one other audience member there (I do not know the name of) who left early. No other member of the public was present for this important meeting.
The Council Members had been given packets earlier that showed the latest revisions to the proposed budget and had many questions throughout the meeting. The approved budget would be available at City Hall for any resident to look at. An audio recording of the meeting is available upon request, portions of the meeting will be posted soon at this site. Gordon Eton began the presentation with an overview of the $5.4 million dollar budget. He stated there are three funds over their budget; vehicle abatement at roughly $4,000 over, the gas tax fund at $7,429 over and TDA (I don't know what that stands for) at $5,859 over. He stated the obvious, that the expenses outnumber the revenue in this budget.
Mayor Bud Leonard had questions about the vehicle abatement income and expenses. He was told that some of the money is re-cooped from the owners of towed vehicles through the court process. Council Member Marks had questions about the water/sewer money since the recent increase in rates. Eton stated that the budget does not cover the deficit for the sewer costs. He broke the news that the city will have to look at increases to the sewer rates to allow for much needed capital improvements. Marks asked about a surcharge on the monthly bill for the sewer. It was explained by Jim Hale that the surcharge is used to pay back a bond issued in 1978. Eton used the term, "significant increase" when discussing what was needed to replace some broken equipment and pay back the deficit. He stated that the rate increases should be done along with plans for the capital improvements needed. He said the city would look at all financing options available for the equipment needed to lessen the impact on monthly bills. This issue should come before the Council some time in August he said.
Council Member Julie Woodall asked about the large jump in the general government column. Eton explained this was due to the annexation related expenses such as personnel costs and such. Eton spoke of $426,000 in revenue promised by Palco to cover the reimbursement to the city for the actual expenses. This would cover things like fee's from the engineering firms, the various studies and the many fee's. They then spoke of the Brownfield grant from the EPA. This is a $200,000 grant of which roughly $40,000 has already been spent and the rest is already committed. Next came the Parks grant of $220,000. This is a use/lose grant that would reimburse the city for expenses related to approved parks projects but there are none in the works currently. The money could not be included in the revenue since it is only available to reimburse for projects the city is not doing. The grant is set to expire, possibly in 2009 but the exact expiration date was not known. (*note-this grant money suddenly appeared in the City's public announcement of the approved budget as if it was revenue. More about this later)
Marks asked why there appeared to be no money budgeted for the legal expenses the city has yet to pay (this would include the recent settlement in the City Manager lawsuit which requires the city to pay legal expenses for plaintiffs, none of which has been paid that I am aware of). Marks stated that if there is an expense, it should show on the budget. Eton explained that the expenses were taken into account when transferring over the starting balance from the prior fiscal year. (Rio Dell has been operating off of a roll over budget from prior years so the legal expenses do not appear anywhere in that budget either) While the debt was incurred in fiscal year '05-'06, the city has yet to pay the bill and there is no money budgeted in '06-'07 except for $20,000 to go for new legal services only.
The Council then discussed the State grant/loan for the water rehab project currently underway. The budget shows $1 million dollars. Leonard asked if this was what remained of the $5 million dollar grant. Eton explained that this was the anticipated expenses for the fiscal year. Woodall asked about the $19,000 anticipated revenue for building plan/engineering fee's and if that was an accurate reflection of the anticipated activity. Eton explained that since this is an unknown amount projected for the future, he kept the revenue number from the prior year. The city has seen record breaking growth lately and this assumes it will continue.
The budget reflects $88,000 for City Manager, assuming the cost of a full-time City Manager salary and benefits. Council Member Mike Dunker asked about the City Manager training fund, budgeted at $3,000 but currently at $4,712 to date. It was explained that the Council Member training expenses also were coming out of that fund and that is why it is over. Hill mentioned that the Council had the ability to create a specific fund for Council training expenses if it wanted to.
The Council next discussed worker's compensation costs. City Clerk Karen Dunham recently attended a State meeting regarding the worker's comp issues. The Cities costs are going to be lower in the future as we have been paying a 25% premium since we were new to the program and the premium will be reduced. The police department expects to add on one position part way through the year. Leonard asked if we would be better off self-insuring the dental and vision insurance but Eton stated that we are better off being in the pool of small communities.
Public Works expects their testing expenses to be going up as there are new requirements for weekly testing and the chemical costs are going up as well. Marks asked if the new system being installed would result in lower chemical expenses. Jim Hale stated that it would but the same budget amount was used from the year before as it is an unknown savings amount. The Public Works department is asking for a new sludge disposal tractor for the sewage treatment plant. This would be about $10,000 and is the highest priority for the department. Audience member Jack Thompson made the suggestion that the city look at lease options for things such as trucks and then use the city money for purchasing other needed items, like a large air compressor we are paying rental fees for. Council Member Marc Barsanti reiterated that it would be wise to look at the lease options for some items and use the precious few dollars to purchase other items that the city is having to rent currently. This makes sound fiscal sense and hopefully will be explored. The Council then discussed the clothing expense budget for public works employees which is primarily used to purchase new work boots. The fund is used to reimburse the expenses for some clothing items that are required by the department or are ruined in the course of work. Work boots alone are quite expensive but are an absolute necessity for safety.
The "general government" section was next and that is a catch-all category for things that don't fit into other categories. Items such as legal expenses, auditing fees, insurance premiums and annexation expenses would reflect in this category. The annexation expenses are projected to be roughly $406,000, subject to change as things come up of course. Hale mentioned the need to evaluate Scotia for ADA compliance (Americans with Disabilities Act). Marks brought up a new sidewalk that was put in Rio Dell at the corner of Ireland and Center St. that has no curb ramp for wheelchair access. There is a crosswalk there but no ramp to get up on the sidewalk (there is a driveway down the sidewalk a little ways but the slope looks too steep). Marks was concerned about the city being liable for any fines for noncompliance if indeed a ramp was required there. Hale told her that it would be the homeowner's responsibility to make sure it complied with the new sidewalk specifications. *The federal government provides free technical assistance to help with ADA compliance.
Dunker asked some questions about training expenses coming out of the general government column and who uses that. Eton said he was not sure but it may be the SCORE meetings that Rio Dell is required to attend (SCORE is the risk management pool of small communities). The Council then took a look at the building department expenses, which Leonard stated "looks like an awful lot." I believe that they stated that 70% of building permit fees go to the independent contractor (Arnold Kemp of Kemp Inspection Service) and 30% goes to the City (double check that one, it seems like an awful lot to me too).
The CDBG (Community Development Block Grant) expenses were discussed next which includes the loans given by the city, administration expenses paid to RCAA and some type of engineer expenses. Woodall had a question regarding billing and staff time. When a staff person is working on something related to CDBG would their expenses come out of that fund or elsewhere. Eton stated that the personnel costs would reflect on the budget for the department the person normally works under. *the County utilizes a time study worksheet for employees so that they can accurately bill personnel hours to the proper fund.
Marks stated, "we aren't aiming for a balanced budget?" Eton responded that he would recommend passing the budget with the shortages in the three funds mentioned before.
Dunker asked about any funds being available to reimburse Council members for mileage expenses related to the City business. He asked if there shouldn't be a specific account for that purpose? Eton stated that there was no money in this budget for reimbursement of mileage for the Council. Leonard stated that the Council was a volunteer group anyway. *I would like to state that I believe the Council members are entitled to reimbursement for mileage and reasonable expenses related to doing the Cities business. If we are going to ask the Council members to pay for these expenses out of pocket than only the people who can afford it will run for office and others will be excluded from participating. If we require Council members to attend or the City benefits from their attendance, then they are entitled to reimbursement and it should be budgeted for. Marks spoke of a packet of material given to the Council members in the past by former City Manager Jay Parrish which provided guidelines for reimbursement, etc.
The motion to approve the budget was given by Woodall with Dunker seconding, it passed unanimously.
The Council members will be receiving financial statements monthly so that they will have better information on the status of the budget.
The next Council meeting was set for July 5th at 6:00pm I will post the agenda ASAP.
The City then released a public statement on the passing of the budget that stated the city is in the black with a surplus of $160,000. This was reported in the Time Standard as well as posted on City Hall's front door. I was pretty surprised since I had attended the meeting and at no time did the city have a surplus. When I looked at the public announcement I saw that they have included the Parks grant of $220,000 in the revenue even though it was clear from the meeting that it does not belong there. The city is definitely not in the black with this budget. I have contacted the city and pointed out this "oversight." It would be wonderful if the city did have a surplus but it is simply not true. If anyone wonders why I sit through the Council meetings, this is why. If I had not been there, the Cities public announcement of a surplus budget would have been assumed to be the truth by the citizens. This is why public participation is so very important. It doesn't matter where you fall on the political spectrum, it matter's that you are involved and asking questions. Your Council can't very well represent you if you don't make your views known and participate.
Please join us at the next Council meeting.
City Council Rio Dell California