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HomeMy WebLinkAbout1999-04-26 Council Minutes - Budget Work SessionKENAI CITY COUNCIL } BUDGET WORK SESSION FOR FY 1999-2000 ITEM 1: APRIL 26, 1999 KENAI CITY COUNCIL CHAMBERS 6:00 P.M. CALL TO ORDER ITEM 2: OVERVIEW OF REVENUES / CHANGES IN THE BUDGET ITEM 3: BUDGET REVIEW A. SPECIAL REVENUE/ ENTERPRISE FUNDS cif time allows) 1. Airport Land System Fund/ Enterprise Fund a. Maintenance and Operations Department b. Administration Department c. Land Department d. Airport Terminal Fund 2. Water and Sewer Fund a. Water Department b. Sewer Department c. Sewer Treatment Plan 3, Boating Facility Fund 4, Senior Citizens/Congregate Housing a. Senior Citizens Title III Grant Fund b. Senior Citizens Borough Grant Fund c. Senior Citizens Title V Grant Fund d. Congregate Housing Enterprise Fund B. DEBT SERVICE/FIDUCIARY FUNDS 1. Debt Service Funds Budgets 2. Land Sales Trust Funds Budgets ***NEXT BUDGET WORK SESSION: MAY 3, 1999 IN THE COUNCIL CHAMBERS AT 6:00 P.M. KENAI CITY COUNCIL BUDGET WORK SESSION APRIL 26, 1999 KENAI CITY COUNCIL 6:00 P.M. MAYOR JOHN J. WILLIAMS, PRESIDING ITEM 1: ATTENDANCE: Council Present: Williams, Moore, Frazer, Bookey, Measles, Bannock and Swarner Administration Present: Freas, Graves, Ross, Semmens, Kornelis, Jankowska, Elson, La Shot, DeForest, Frates, Kelso, Holland and Morris. Mayor Williams introduced the city's new librarian, Ewa Jankowska and welcomed her to the City of Kenai. Williams also referred to a copy of the draft letter to Governor Sheffield regarding the design and construction of three railroad barges discussed at the April 21 council meeting. Council approved the letter and all signed it. ITEM 2: OVERVIEW OF REVENUES / CHANGES IN THE BUDGET City Manager Ross noted, there were two major issues not addressed in the budget; Municipal Assistance/ Revenue Sharing and health insurance. He added, the Legislature had not yet made a determination in regard to what amount or if any Municipal Assistance/Revenue Sharing would be distributed. Also, an employee committee was reviewing options for health insurance. Ross noted, due to increases in the present health care plan, costs had been increased. The increased costs were not reflected in the draft budget. Ross also stated, after the bids are opened on the multi -purpose facility, administration would be able to give an actual on the fund balance. Ross reported, he had been contacted by the State who received federal funding to purchase wetlands and were interested in properties along the Kenai River. He told them no proposal should be submitted to the city for properties below the bridge and that if a proposal was submitted with appraisals for properties above the bridge he would review them. Ross asked council to let him know if they were not interested in the concept, he would need to know. Ross suggested council might consider sale of wetlands as an income source for the city. No comments were made by council. Finance Director Semmens distributed a handout of information which included, the Fiscal Year 2000 Operating Budget; Budget Comparison and Contribution to / from COUNCIL BUDGET WORK SESSION APRIL 26, 1999 PAGE 2 fund balance; graphs depicting revenue sources and expenditures by object; COLA vs. CPI; budget projections; General Fund revenue sources; expenditures/ appropriations; General Fund summary by line item; General Fund Expenditures by function; General Fund budget increases; future impacts on fund balance; budget projection for Water/ Sewer Fund, Airport Land System; operating budgets for the Boating Facility Airport Terminal and Congregate Housing Funds. Semmens reviewed the information with council. He noted the sales tax was projected to be the same as last year; the Fish Tax income was down (which was based on the value of the Cook Inlet salmon catch); and the state revenue funds received were decreased significantly. A general discussion took place in regard to investments that can be made by the city. Semmens noted, what the city can invest in is limited. To allow additional types of investments would require a change in the code. Semmens noted, the income from the sale of Five Iron Heights Subdivision properties will go into the General Land Trust Fund. The interest earnings go to the General Fund. He added, other revenues not included were HEA capital credits, possible refunds from Workers' Compensation, and miscellaneous land sale (Inlet Woods) . Discussion followed regarding the expected settlement of the Inlet Woods litigation and Williams suggested 20 lots could be marketed each year which would bring a stream of income to the General Fund of approximately $300,000 for the next ten years (129 lots included in the settlement). Attorney Graves noted an estimated $700,000 should be received from the settlement other than the lots. 3-A. Special Revenue / Enterprise Funds 1. Airport Land system Fund/Enterprise Fund a. Maintenance & Operations Department Acting Airport Manager Holland reported the amounts included this year were the same as last year, except for several items in the individual operating budgets. He noted crack sealing, which had been done every two to three years, was now being done every year on rotated basis. De-icer would be purchased in bulk and would lower the cost to half. Other items noted were: the fire pits and picnic tables should have been removed from the budget; advertising was decreased due to a lack of bids needing to be held; brush removal would be continued; helicopter rentals was removed; due to FCC requirements, new radios would be purchased; an overhead door would be installed to accommodate the new broom at the shop; and ARFF training was included which COUNCIL BUDGET WORK SESSION APRIL 26, 1999 PAGE 3 is required by the FAA. Holland explained the training is free, but there was cost included to cover the propane and payment for the technician. Ross explained a change was made in the allocation of salary for his Administrative Assistant because airport lease files, etc. were now being handled by the airport staff. FINDING: No changes. b. Administration Department Holland reviewed his budget for Airport Administration. He noted an increase in small tools for additional furnishing for the airport manager's office; transportation was increased to cover costs for the manager to market the airport; advertisement increased for promotional brochures, radio ads, conferences, etc.; funds were included to purchase a small copier for the office; and costs were included to upgrade the phone system in order to allow transfer of calls, email, faxes, etc. Holland also explained the clerical position was upgraded to a full-time position in order to help customers at the airport terminal, administer airport leases, tie -downs, etc. Also, an office was set up in the front area for the public contact, a conference room, airport manager's office, etc. were also being developed. It was also noted professional services was increased. FINDING: NO CHANGES. C. Land Department Ross explained, one-half of the administrative assistant's salary was moved to this budget (the other one-half would continue to be charged to the city manager budget). He noted the aerial photographs should be removed from Professional Services as they had been taken last year. Ross noted, he did not expect there would be utility expenses for the Dairy Queen building next year and it was an unknown as to the costs for the ARFF. He also noted the easement for the Dairy Queen driveway from Main Street Loop had never been recorded. A discussion in this regard would be brought to council at their next meeting. FINDING: NO CHANGES d. Airport Terminal Fund COUNCIL BUDGET WORK SESSION APRIL 26, 1999 PAGE 4 Holland explained additional costs were included in this budget to cover purchase of software to manage the heating system; cover janitorial service increase; carpeting (RFP's will be advertised after the tourist season); restaurant and lounge monitoring system; and replacement for the rooftop heating system (the present one is 12 years old and parts are hard to acquire). Swarner requested she be included on the selection committee for choosing the carpet. Holland noted they hoped to use a professional person to review needs and help make the choice as well. FINDING: NO CHANGES. 2. water and Sewer Fund a. water Department Ross noted $5,850 should be removed from Professional Services in regard to the GIS water services (the remainder of the costs was being deducted from the General Fund). Kornelis noted the budget was basically the same as last year's budget. However, an upgrade to the Wonderware System software would be purchased, and additional phone lines would be required. Swarner asked if there had been any discussion in regard to emailing utility bills. Semmens answered, there had not been. However, it could be possible in the future, though additional expertise would be required to mainstream the process, as well as other software. Kornelis also noted a consumer report, required by the federal government, would be sent to all utility users during the year. Semmens explained transfers out were high during last year due to municipal match monies. FINDING: NO CHANGES. b. Sewer Fund Ross noted, $5850 (to cover costs for the GIS system) should be removed from Professional Services. Kornelis noted, there were not many changes in this budget from last year's. Ross noted, council had requested him to review the pay differences between the Water/ Sewer operators and the STP operators. He noted, both water/ sewer operators need to be certified to fill in at the STP. Ross added, because those positions require the same training, his recommendation was to raise the COUNCIL BUDGET WORK SESSION APRIL 26, 1999 PAGE 5 water/sewer operators level of pay to that of the STP operators. He noted, an ordinance would come before council in the near future in order to make that change. FINDING: NO CHANGES. C. Sewer Treatment Plant Kornelis noted there was a deduction in operating supplies due to the reduction in use of hypochloride and finding ways to cut costs with the other chemicals. He noted, they would be removing the scrubber as it is not needed when using liquid chloride. FINDING: NO CHANGES. 3. Boating Fund Facility Kornelis reported the rents and leases would be at least $38,300; the largest costs in operating supplies was for fuel; printing and binding included costs for printing launch collection envelopes; rentals included portable toilets for use during dipnet season; and depreciation was a big item. Williams noted the closure of two of the local canneries may mean more salmon coming over the city dock. Bookey agreed and added, he believed there would be more small cannery businesses and their fish would need to have somewhere to come off the river. He thought more revenue would come over the dock this year as well. FINDING: NO CHANGES. BREAK TAKEN: 8:45 P.M. BACK TO ORDER: 8:55 P.M. 4. Senior Citizens/Congregate Housing a. Senior Citizens Title III Grant Fund Kelso noted, because the first three funds were grants, no information as to what the revenue would be would be available until after the budget was approved. Kelso reported the Title III grant included funds for Meals -on -Wheels and in -kind support through rentals of the building. She added, the grant requires the funds to be divided between senior/congregate and home meals and senior transportation. COUNCIL BUDGET WORK SESSION APRIL 26, 1999 PAGE 6 Also one -quarter of her salary was paid from this grant. She added, the grant basically paid for salaries, food and gas. FINDING: NO CHANGES. b. Senior Citizens Borough Grant Fund Kelso explained this grant included funds received from United Way, Borough and rentals of the building. Funds transferred in included $24,000 to cover costs of utilities. She noted, this fund was the "meat and potatoes" of her budget, allowing funds for operating supplies, training work shops, etc. FINDING: NO CHANGES. C. Senior Citizens Title V Grant Fund Kelso explained these grant funds pay for four positions of older workers who are paid a minimum salary. Funds are also used from this fund to pay for physicals for those four workers. FINDING: NO CHANGES. d. Congregate Housing Enterprise Fund Kelso stated it was her understanding that funds received from apartment rentals were to be fed into the enterprise fund to cover future costs for carpet, refrigerators, etc. which be needed for the future. Upon fulfillment of the $500,000 level, the funds would flow into the General Fund. However, there was also the understanding that if there was a great need in the senior program, funds could be provided to cover the need. It was noted, major replacement of carpeting and appliances would be done in the next few years. FINDING: NO CHANGES. 3-B, DEBT SERVICE/ FIDUCIARY FUNDS 1. Debt Service Funds Budgets Semmens reported the City's total outstanding debt was $1.1 million which was entirely from the Inlet Woods bond. FINDING: NO CHANGES. COUNCIL BUDGET WORK SESSION APRIL 26, 1999 PAGE 7 2. Land Sales Trust Funds Budgets Airport Land Sales Trust Fund -- It was noted both the Dairy Queen and Etolin Subdivision properties were Airport Lands and if sold, the fund balance will be $10.3 million. It was also noted approximately $305,000 was raised in selling the Five Iron Heights properties, thus far. However, properties from the Den'aina Point Subdivision were being returned to the city which would be a deduction on that figure. Williams requested a report be prepared noting the property, the owners, what properties were deeded back, etc. Ross stated he would try to have that report forwarded to council by the middle of May. General Land Sales Trust Fund -- Semmens reported he expected the fund to end up over $2 million because there are other city lands available for sale. ITEM 4: ADJOURNMENT Ross noted the next budget session had been scheduled for May 3, however it was not known if information would be available from the Legislature in regard to municipal assistance and revenue sharing by that date. It was decided to cancel the May 3 budget work session and hold one on May 10 instead. The budget work session adjourned at approximately 9:32 p.m. Notes transcribed and pre ared by: �,� AP P R0" " '�''� Carol L. Freas, City Clerk CLERK DATE COUNCIL BUDGET WORK SESSION APRIL 26, 1999 PAGE 8