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HomeMy WebLinkAbout1992-04-27 Council Packet - Budget Work SessionKenai City Council Work Session April 27, 1992 Budget WORK SESSION APRIL 27, 1992 7:06 p.m. Kenai City Council Chambers Council Present: Williams, Measles, Swarner, Smalley, McComsey, Walker (arrived approximately 7:30 p.m.), Monfor (arrived 9:10 p.m.). Administration Present: Brighton, Graves, Brown, Freas. Staff Present: Ernst, Kornelis, Howard, LaShot, Meeks, DeForest, Feltman, Lawyer, Porter, McGillivray, Johnson, Burnett, Springer, Ross. Others present: Ethel Claussen, Kathy Heus. REVIEW 4120192 FINDINGS_ Congregate Housing: Brighton stated that the General Fund was depleted by $1 million above the budget last year. Brighton stated that it is good business rationale to use some of the money raised from the project to replenish the general fund. Brighton believes that in the next two years there will be substantial tax increases unless a strong effort to protect the fund balance is made, or to replenish it to close to what is was. Brighton stated that in the memorandum included with the budget, they indicated the congregate housing was to transfer $54,000 to the General Fund on an annual basis, plus $90,000 to a similar fund for the operation and maintenance. Brighton added that nothing was stated as to what must be done with the revenues gathered from the operation of the facility. Brighton restated that it :is good sense to take a portion of the proceeds and place it back :into the fund balance. Brighton stated that Administration and Council will be asked to tap into the fund balance for other purchases and at this time, with revenues down over 6%, there does not appear that there will be any building on that fund in the near future. Brighton stated he is attempting to protect the fund balance. If the fund balance :is depleted, no revenue will be gained from it for the operation of the city. The budget is the overall picture. Williams was concerned that the City's donating the land was well -documented in grant papers and All -America City application, etc. Williams stated the revenue stream should be set aside -1- separately from the main part of the budget. Williams suggested to open a. major savings account for ongoing and long-term maintenance. Brighton added that the Council's responsibility is to the entire City, not. for the congregate housing. Williams stated he wants the money set aside to guarantee it will be there when needed. Brighton stated that if the fund balance is treated with the same concern that Council is trying to treat an escrow account, there would not, be a problem. Discussion followed regarding the expenditures from the fund balance. Smalley agreed that a fund should be set up from revenue generated from income from the building for maintenance and equipment. Smalley was unsure where that money should be held. One percent is acceptable. Measles stated that any unappropriated revenue should be put in a reserve account. Measles suggested a cap on that reserve -- maintained at $1 million or whatever the worst case scenario would require. The balance after the cap should be put in the general fund. Brown suggested language to include 11$50,000 a year if available or 75%, which ever is greater." Brown stated his reasoning is in case there is a bad year. Brown stated he believed it a mistake to put everything in the reserve fund. McComsey agreed there should be reserve fund. Brighton added that nobody disagrees with that. Williams suggested to start at a $50,000 reserve fund. Brown again stated that the language should state 11$50,000 if net income is available, or 75% of the net income, whichever ::is greater." Whatever is left would go to unreserved. If revenue shortfalls, utility increases, operational problems, etc. so that not everything is put .in the reserve that is restricted to capital.. improvements. Williams stated that it will have to be worked out. DEPOSITS TO RESERVE FUND: Williams stated $300,000 to heavy equipment fund and maybe next year cap it. BICENTENNIAL BUILDING: Williams stated that .it was decided at the previous session to add $25,000 to the Bicentennial budget from bed tax monies. The annual figure is to remain at $25,000. -2- Brighton asked if Council realizes that will be $110,000 a year that the City is funding in the first year. Williams stated that it will be $75,000 the second year with bed tax monies at 30% occupancy. Brighton stated that over the last three years the City has funded the Bicentennial $100,000 a year. Before the building was completed. Discussion followed regarding the funds to the Bicentennial building. The Bicentennial's budget will be: $ 50,000 - City 57,000 - Bicentennial grants 36,000 - City, Maintenance & Operation 25,000 Conventions/bed tax $168,000 Brighton stated that the amount budgeted is $86,000. It was discussed at the previous work session that $25,000 will be generated from bed tax up until the end of the fiscal year. McComsey suggested waiting until the bed tax money is received before promising it. Brighton stated there is always the chance that hotel/motel owners may get an injunction to stop the bed tax. Graves stated he sees no problem with the bed tax. Walker stated that it could be a lz years before the money is collected. Brighton stated the big picture is that the revenues are down approximately 6.9%. The City is making a lot of new expenditures with the revenues down. The only way to replenish is to raise the taxes. All new additional spending for each $25,000 is 1/10th of a mill increase. If the revenues go down, the same kind of spending cannot be maintained without increasing taxes. McComsey stated that the Bicentennial budget should go as originally set by Administration. Discuss t1ais item again at next work session - May 4, 1992. STREET/AIRPORT PERSONNEL_ Brighton staged that it. is not the position of the Council to negotiate between the Airport and Public Works Department. There were no changes made by Council in reference to the Street/Airport Personnel - FORT KENAY - PLAN B: Discuss the "Plan B" at the next work session when Councilwoman Monf_or is present. Brighton reported that lie, Kornelis and Administrative Aide Howard mei: with representatives of the Church. The Church will -3- give an easement in order that the City can pave the street. The City has a first -right -of -refusal for the old cabins behind the Fort. Public Works is working on the engineering for the paving. Brighton hopes to cancel the lease at the end of the fiscal year. No budget is required for Fort Kenay in the next fiscal year. Brighton added that the Church is will come immediately at the time It may take a few years before the wi11 come from CIP funds. DOCK: not anticipating the paving of cancellation of the lease. paving is done. The money No major cost for placing electricity for small dock businesses. Cost can be included in the user fees. BROCHURE: Williams asked for $10,000 for printing a brochure, starting from scratch. This will insure the City's right to reproduce. Walker suggested narrations, photographs, etc. can be done by a committee of councilmembers which will lessen the cost. Walker suggested the cost too high. Smalley and Measles agreed. To be discussed again at the next work session. Williams then stated to take off the budget. RESOURCE DEVELOPMENT COUNCIL: Swarner suggested the City drop their membership. Measles disagreed, stating thatthere are many items to which the RDC directs attention. McComsey agreed to keep the membership cost in the budget. RDC membership stays in. ALPAR: Keep in the budget. PENINSULA CAUCUS: Brighton stated that the Borough is paying a membership fee which comes from the whole Peninsula. The City pays also -- the same as paying twice. The fee has increased to $632. Budget should be increased to $640 for membership to Caucus. LIBRARY PERSONNEL: -4- 1. Addition of personnel - If Sunday openings added, a part-time person would be needed for 20 hours per week. There would be no benefits. A $5.00 library card charge was discussed to cover the costs of additional personnel, books and Sunday openings. Williams added that a 5% cut is being made this year and next. year may have to cut personnel next year. Brighton stated that the Library budget was cut $119, which is the smallest cut other than in communications and animal control. Less than 1/10 of 1% of a reduction. Walker stated he did not want to charge for a library card when other services are still at no charge, i.e. fire, police, ambulance services. Brighton added that a $5.00 card fee is a real bargain considering all the services it allows. Smalley and Swarner were in favor of adding a 1/2 time person and have Sunday openings at the Library. Williams stated it is not affordable. Walker suggested user fees on use of projectors, videos, etc. Advisory Vote:: Addition of part-time employee? 2 No? 4 2. Sunday openings, Swarner :stated Sunday openings are not possible without the addition of a part-time employee. Brighton stated it would be expanding services, and the City is not in a financial mode to expand services. Library DeForest stated that she did not ask for another employee of Sunday openings. However, some day they will be necessary. BEAUTIFICATION FUNDING: Williams is concerned the budget is too small. The purchase of the bucket truck will lessen the cost for placing Christmas decorations, etc. Beautification budget. is to stay as it is. CONGREGATE HOUSING: Clerical help. Williams stated this item is premature. Hold for future discussion. STREET LIGHTS: Swarner stated she has had street light requests. Walker stated he would like to see more lights placed, but the City cannot afford it this year. Smalley, McComsey agreed. -5- No additional money for street lights. ALL-AMERICA CITY AWARD PROGRAM: A transfer of monies will be made at the next council meeting to cover airfare, hotel, and per diem for seven people to go to Charlotte, NC. No additional funds needed at this time. CITY MANAGER'S SALARY: Williams questioned the addition of salary to the City Manager. Brighton stated it: is a 4% raise. Swarner stated this should be discussed at the next council meeting along with the City Clerk and City Attorney salaries. Brighton stated he does not remember a cap on his salary. Williams stated to CAB to move Brighton's salary beck: to current salary. CITY VEHICLE USE: Swarner :stated she would like to discuss the use of City vehicles for personal use by department heads. EMPLOYEE SALARIES: Smalley stated he would like to discuss again the employee's salaries at the next work session. CLARION/ANNUAL RECREATION GUIDE: Williams requested that the City purchase a full page for $775. A letter of welcome would be placed. Okay. ALL-AMERICA CITY: Clerk Fre:as stated that it was determined that it will cost approximately $1,100 per person to travel to Charlotte, N.C., which includes hotel, airfare, and per diem. Freas added that Williams had suggested that City pay for seven representatives to attend. Williams stated that there should be an "A" team and "B" team. The best group should go to make the presentation in Charlotte. The "B" team should go to Washington, D.C. to accept the award. if Kenai wins. Smalley stated he would support seven going. DISCUSSION FOR NEXT WORK SESSION: 1. Personnel salaries - Smalley stated he would support 3.6%. Administration suggested 4%, last work session suggestion was 2.5%, 3.6% Smalley suggested it should not be less than this amount. Q. Discussion followed. 3.6% as a cost -of -living increase and 2.5% as step increase for those who are entitled to it. Walker suggested 2-2.5%. McComsey stated the only people getting raises are those in government. McComsey does not support a 4% raise. Brighton stated that if Council is interested in being included in another RIP, they should discuss it. Time is short to be included. NEXT MEETING: May 4, 1992, 7:00 p.m. ITEMS TO DISCUSS: 1. Employee salaries.. 2. Use of vehicles by department heads, cost of operation, etc. 3. Bicentennial/additional monies - $25,000. 4. Set mi ].1 rate. Work Session ended at 9:25 p.m. -7- nur9m 217 Second Srraet Sulte 2C0 a j,..jneau, Alosko 99801 s Tel (907)586-1,325 �cX (9C/?4b3 54dC FAX COVER LETTER Date; April 27, 1992 Following pages are for: Mayors, Managers/Administrators, Council/Assembly Members, Clerks, and Others Interested In Local Government 'rr From: Scott A. Burgess, Executive Director The Senate Finance Committee approved its version of the FY 93 operating budget oil Saturday. The caucus (as you will recall, all 20 senators are in the same caucus) will discuss it beginning at 10 a.m. on Tuesday. Contact your Senators by 10 a.m. Tuesday to let them know that the cuts proposed by Senate Finance, while better than those proposed by the House, are not acceptable to municipalities! The general find portion of the Senate budget totals $2,188,632,000, as compared to the:; House -passed general fund budget of $2,102,815,200, The Senate version represents an overall cut of 2.4 percent from the Governor's proposed budget, yet municipalities are once again being asked to "give more" -- in this case 5-6 percent over and above the 40 percent cutbacks of the last 5 years In programs of municipal support. The Senate budget innJudes the following cuts: ■ 6 percent ($2,300,800) cut in State Revenue Sharing from Governor's FY 93 proposal, leaving $36,046,200. AML asked for $41,472,000; House approved funding of only $34,512,300, a 10 percent cut. ■ 6 percent ($2,798,900) cut in Municipal Assistance from Governor's FY 9:3 proposal, leaving $43,849,100. AML asked for $52,747,000; House approved on[y $41,983.2, a 10 percent cut. ■ 5 percent ($141,940) cut in funding for senior citizens/disabled veterans property tax exemption program. AML asked for full funding for FY 93 and it rebate program in FY 94. AML has supported legislation to make program optional for municipalities, as proposed by the House (HB 573). The House "zeroed out" senior citizens for FY 93. On Wednesday, April 29, the Senate HESS Committee will consider HB 573, which would make the property tax exemption program a local option. Let HESS Committee members know that you favor making this state mandate a local option. DECIS1014S AFFECTING THE BUDGET TO BE PASSED ON THE FLOOR LATER THIS WEEK WILL BE MADE IN TUESDAY'S CAUCUS -- LET YOUR SENATORS KNOW RIGHT AWAY THAT MUNICIPALITIES HAVE ALREADY BEEN CUT AND CANNOT GIVE: ANY MORE -- C92test: sbudfax.427 Me,r.ber of the National ! eagoe of Cities and the Notlo�)oi Associotion of Counties PUBLIC MEETING NOTICE The Kenai. City Council will convene in a work session on Monday, April 27, 1992 at 7:00 p.m. in the Council Chambers. The following item will be discussed at that time: CITY OF KENAI BUDGET The public is invited to attend and participate. Carol L. Freas City Clerk DATED: April 22, 1992