Loading...
HomeMy WebLinkAbout2001-04-10 Council Minutes - Budget Work SessionBUDGET WORK SESSION APRIL 10, 2001 7:00 P.M. KENAI SENIOR CENTER MAYOR JOHN J. WILLIAMS, PRESIDING Council Present: Frazer, Swarner, Porter, Williams, Moore, Bookey and Bannock (arrived at 7:35 p.m.) Staff Present: Freas, Semmens, Ross, Graves, Morris, La Shot, Jankowska, Kelso, Wannamaker, Walden, Cronkhite, Frates, Kornelis. Others Present: Hal Smalley, Ethel Clausen, Bob Peters, Robert Ruffner, Nate Kiel Williams stated he wanted to hear the budget overview from administration and then discuss the Legislative, perhaps capital improvement budget, as well as an update on CARA funding availability. CARA Funding / Bluff Erosion & Coastal Trail Project: Ross explained he received a telephone call from Paul Fuhs who reported the State would be receiving $8 million in CARA funding. The borough had already projected that of the $800,000 the borough would be receiving, $150,000 would be used for coastal zone management. Because the city has been working with the borough in regard to the south shore, it was hoped some of the $150,000 would be dedicated to protection, etc. there. Ross added, the Borough's Director of Planning, who has been involved in the coastal zone management funding, indicated getting support from the borough for the $150,000 will be helpful in obtaining an additional $450,000 (from the $8 million) from the State's Government Coordinating Committee. A briefing paper was sent to the borough and will be proposed at the borough level. Ross believed the city had a good chance of receiving the $450,000 because the engineering and design were ready. Projects for use of the $150,000 could include educational signs, enforcement, and possibly supplementing overtime costs on the south shore of the river. Robert Ruffner (Kenai Water Shed Forum and in the audience) reported $16,000 was in the budget for the south shore projects and it was his understanding CARA funding probably wouldn't be available for the coastal zone program until September. Williams stated Fuhs was excited about the funding possibilities and Williams indicated to him the city needed to identify how the $450,000 could be included in the $8 million for the engineering. Budget Overview: � Semmens offered a budget overview presentation including all the funds and noted the budget total was $13,065,347 and would be funded by $12 million in revenues, fund BUDGET WORK SESSION APRIL 10, 2001 PAGE 2 balance, etc. Last year's budget was $12,412,000, an increase of $652,000. A pie chart indicated all fund revenues were divided as follows: Others, 24% (ambulance fees, water/ sewer fees, etc.); Fund Balance, 6%; Transfers, 11 %; Taxes, 39%; Interest, 15%; State/ Federal Taxes, 15%. Semmens reported he was projecting a small increase in assessed value; sales tax projected to be more at $3.9 million as there are indications the economy was picking up in Kenai through oil/ gas exploration, residential land sales, etc. (approximately 3% increase); municipal assistance/revenue sharing expected to be the same; fish tax is an average; interest revenue is decreasing; and the total revenue was projected to be $81092,000. Semmens also reviewed General Fund expenditures and noted that if all the budgets were spent and the revenues came in as planned, there would be a deficit of $501,000. However, he anticipated approximately six percent of the budget amount would not be spent ($515,000) and would give a $14,000 surplus. Next Semmens reviewed the individual departments, their original, amended, and recommended budgets. Williams noted the Parks 8. Recreation budget increased by 20% over the last two fiscal years and Beautification was increased by 70%. He asked to what the increases were attributed and it was noted there would be additional personnel (additional hours) , repair and maintenance, operating supplies (flower purchase instead of being grown) and improvements (cemetery fence, refurbishing the Recreation Center floor, etc.) . Semmens also reported the following: • The projected revenues are up slightly for the water/ sewer fund, the expenditures are anticipated to be slightly less than last year's budget, and in the future, a rate increase will be needed. • The Airport Land System budget is slightly lower because the new fuel sales owner sells fuel in a different way (based on where the fuel is sold) that the city does not receive fuel sales taxes and losing the local carrier who bought their fuel in Kenai. • The landing fees have been increased and will show a rise. • Land lease rents are lower. • They expect a slight deficit in the expenditures but overall, the fund balance is in good shape. • The Boating Facility Fund will break even after a $7,000 transfer from the General Fund. • The fuel sales are not keeping up with the budget. • The Boating Facility Fund is still astand-alone fund, but now there is no depreciation (which can be changed by council if desired). • The Senior Citizen Title III Fund (funded by grants and meal donations) is a break-even fund. l BUDGET WORK SESSION APRIL 10, 2001 PAGE 3 • Senior Citizen Borough Grant Fund -- The in -kind transfer from the General Fund is used for paying utilities and a slight increase for utilities is expected. • Senior Citizen Title V Fund -- a senior employment program and is totally funded by grants (down from the current budget) . • It is expected to receive money from assessments from lots purchased in Inlet Woods in the Debt Service Fund. The debt service is transferred from the General Fund which will have to be paid by 2005 and will have to be paid from the General Fund. • Very little change in the Airport Terminal revenue and a $15,000 deficit was projected, however with the lapse, it will be a break-even budget. • Revenues are consistent in the Congregate Housing and is a break-even fund. BREAK TAKEN: 7:50 P.M. BACK TO ORDER: 8:02 P.M. General Discussion: Ross referred to his letter included in the budget document and highlighted the following changes: • Projecting a 3% increase in annual sales tax for 2002 (based on reality of what will be received this year) . • Changes in projected revenue growth and an 8% projection of lapse eliminated the forecast of a mil rate increase in the next several years. • Updated narratives were not included for the departments whose requests for changes in personnel were recommended by administration. • Recommended personnel changes include: adding back a position cut five years ago in the Police Department (will be 58% federally funded) ; replacing the bulk of contract hours and records system with a 20-hour position in the Clerk's Department (it was noted the person would be situated in city hall after the nurses move from the downstairs and it would be a decision of the council if the person would be used as the deputy clerk); a six-month temporary position to assist in crack -sealing maintenance, etc. in the Street Department; rewrote the job description for the Administrative Assistant position in the Planning 8, Zoning Department and recognized it as a planner, upgrading the position; adding a 25-hour position in the Planning 8s Zoning Department and eliminating the engineering tech hours in the Public Works Administration; increased a part-time position in the Library to full-time position; upgraded a Range 3 position (supervising recreation) to a Range 6 position. • Major expenditures (not previously programmed) include $50,000 for carpeting and the ventilation system repair at the Senior Center; repair & maintenance of the Library parking lot (Streets Department) ; replacement of emergency generator in the Public Safety; purchase of sand for streets. 1 BUDGET WORK SESSION APRIL 10, 2001 PAGE 4 • Capital projects were not included in the budget; engineering has begun on ice refrigeration and direction whether or not council wants to pull funds from the fund balance ($1.5 million?) and what project they want to do. • Funds were not included in the budget in regard to renovation of city hall once the nurses move to their new building. Ross explained funds were not included in the budget. He added, a plan was submitted by an employee committee who reviewed different options, looking at public traffic flow, who interacts with whom, space needs, etc. He added, he believed it was a very good plan and he expected to leave those decisions with the incoming city manager and council. Since the nurses wouldn't be moving from the building until July, he believed there would be plenty of time to discuss the matter further. Since some of the renovating work could be done in-house (except possibly engineering for some of the electrical), he didn't believe the costs would be significant. When asked what the mil rate increase would be if money would be taken from the fund balance for the refrigeration project, Ross suggested a quarter of a mil if $1.5 million is taken which would allow for some excess with which to contract for operations. He added, refrigeration would increase the utilities by $35,000. However, if a half -mil raise were made, there could be enough funds to build a skateboard park. • Funds were included to replace the emergency generator for the public safety building -- the current generator is 30 years old and part replacement is becoming more and more difficult. The structure in which the generator resides may. need some minor alterations to accommodate the new generator. The transfer switches are still in good shape. Hockey Rink: A lengthy discussion took place on the capital outlay for refrigeration at the multipurpose facility. Williams noted, there would be cost outlays for the Youth Detention Facility (cost of property, perhaps $200,000) and coastal zone trail project (but the amount was not known). Other possible capital costs were noted as the renovation of city hall and addition to the library. Comments regarding the refrigeration project were: • It is not known what refrigerating the ice will return through direct revenues, sales tax income. • Generally agreed the project needs to go forward, the $1.5 million would include the buy out of the LLC, and the city needs to take over the project, however it is more important the project go forward and the buy-out is secondary. • Concern of effect to the budget if an additional $ 1 million were taken for a library expansion. • Nate Kiel (speaking for the LLC) stated their members would continue their support of the facility through the winter and summer. He noted, with new dasher boards and new rink, hourly rates could be held at under $100 an hour, demand for the use of the rink with guaranteed ice for practices, games, figure 1 BUDGET WORK SESSION APRIL 10, 2001 PAGE 5 skating, etc. will be very healthy. He suggested council consider the indirect benefits the facility's use will have to the community, i.e. hotel rentals, shopping, etc. Williams noted council's unanimous consent of using $1.5 million from the fund balance to install ice refrigeration to the facility and directed administration to prepare a revised review of the budget based on the idea that $1.5 million will be used from cash (not from bonding or another source). Williams requested the revised review also take into consideration the revenue losses and how they might be recovered through both revenues from the rink and through a mil rate increase sufficient to cover the losses to the cash position of the city regarding operating costs, interest on capital loss, etc. Ross stated administration would bring the operating portion as a contract professional services rather than in-house addition of personnel because there may be an opportunity to contract with a group who have refrigeration maintenance certifications, Zamboni care experience, etc. He added, at the first opportunity, the city would probably contract for the services in order to see what's involved for the first year. He noted, the plan includes restrooms as they will be required with the upgrade of the building. Letters of request: Williams referred to copies of letters of request received from Boys & Girls Club (ALPAR), Kenai River Watershed Forum (Kenai River Festival) , and Central Area Transit and requested council review them prior to the next work session. He also referred to an abstract summary for the feature-length documentary proposed by Randy Chalawsky. Williams explained he and Swarner talked with Chalawsky in regard to funding and it was their idea to bring it to council. Williams added, he was proposing splitting a $40,000 donation toward the project between the City of Homer, City of Soldotna, Borough, and the City of Kenai and spoke to several of the entities, receiving enthusiasm, but wanting additional information. He will report back to council in regard to his discussions with all the entities at the next budget hearing. Additional Comments: • Ross will bring back the cost information requested in regard to the ice facility. • An effort will be to go through the entire budget at the April 17 budget work session, as well as discussing the impact the $1.5 million will have on the budget. • If the entire budget is not reviewed on April 17, Williams requested waiting until May 1 because he may be out of the state (traveling to Washington, DC at the invitation of Governor Hickel in regard to fundraising for Alaska Pacific University and the Northern Institute as well as meeting with congressional delegation regarding coastal trail, etc.) . Porter stated she would not be able to attend a work session on April 24 either. � BUDGET WORK SESSION APRIL 10, 2001 PAGE 6 • City manager search work session would be held at 7:00 p.m., April 11 at the Kenai Senior Center. Adjournment: The work session adjourned at approximately 8:55 p.m. Notes transcribed and prepared by: Carol L. Freas, City Clerk