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HomeMy WebLinkAbout1996-04-10 Council Minutes - Budget Work Session• I{ENA[ CITY COUNCIL BUDGET WORK SESSION APRIL 10,1996 KENA1 SENIOR CENTER COUNCIL PRESENT: Swarner, Moore, Bookey, Williams, Smalley, Measles and Bannock (who arrived at 7:40 p.m.). STAFF PRESENT: Freas, Kornelis, Springer, Ernst, McGillivray, Porter, Clark, DeForest, Graves, Moore, Burnett, Manninen and Sweeney. OTHERS: Kim Booth, Kenai Visitors Center and Melissa De Vaughn, Peninsula Clarion. Mayor Williams began the session by reviewing the list of corrections from the previous work sessions provided by Finance Director Sweeney. Williams noted that the corrections and changes to budgets amounted to approximately $99,000. Adding about $46,800, plus some costs associated with Municipal Park restroom, rewiring Christmas tree lights, etc. Williams added, in their deliberations, they probably added and deleted the same amount. • Williams added, there were notes in regard to requested proposals for building repairs. He suggested council could speak to them at this meeting, or hold them until the last work session when final adjustments would be made and all would be layed out in front of them on a line4tem basis with the totals. Williams directed Sweeney, that when he does a recap, the line items are totaled up so that they will be able to see how they are moving up and down. ACTION: Sweeney is to prepare a recap with the line items totaled up so that they will be able to see what the balances are, etc. Sweeney to supply all requests listed an a line. Item basis with the totals for the next work session. Include the C.A.N. System on the line -Item list for the next work session. Senior Center Carpefing - Williams reviewed the proposals for building repairs, i.e. carpet for Senior Center (approximately $5,000). This would be to install the carpet and pad the City already has. The carpet contractor suggested other padding be used. The different padding would increase the price from about $2,000 to $7,000. Community ert Netwk (C.A.N.) Svs�,,tem_ - Williams noted this information was new to council. Information about the system was included in the work session packet. Cost would include a $1,000 membership fee each year and a $1.00 per phone call fee. Without the membership, cost for using the system would be six times the normal user 0 •KENAI CITY COUNCIL BUDGET WORK SESSION APRIL 10, 1996 PAGE 2 ($1.00) fee. Burnett explained, if there was a chlorine leak, one phone call to the affected area would have everyone notified. This would eliminate the Departmears needing to call each home individually. Preliminary Taxable Values for Assd, proms - Williams noted there was a slight adjustment to the preliminary tax values for assessed values. The change would decrease the General Fund by approximately $9,600. CICADA Information - Williams noted the additional information (4/5/96 TM memo and letter of support) in regard to CICADA. Unfinanced Requirements List - Noted. ARFF Report - Williams reported he, along with Manninen, Burnett and Ernst had met with the Alaska Fire Chiefs Association in Anchorage that day and made a presentation • in regard to the proposed Alaska Aircraft Fire Fighting Center. They mentioned the City would be building the facility as a statewide facility and would be the owner of the facility, but would not dictate as to policy, curriculum development, instructional usage, etc. and would have a statewide advisory board to run it. The board would then set their own budget, fees, etc. The Alaska Fire Training Services were concerned, but after hearing their presentation, better understood that the City only wants to train how to put out aircraft fires. Challenger Center Rep„ - Williams also reported he met with - Riley Snell- (AIDEA)- and Jamie Kenworthy (Alaska Science & Technology) about the Challenger Center. There is a possibility the City will receive an additional $5,000 from Alaska Science & Technology to continue the study. Williams requested the $20,000 he had included in the council budget for the facilitator of the Challenger Center ($10,000 from AIDEA and $109000 from Alaska Aerospace Development) remain in the budget even if an additional $5,000 is received. Health Nurses - Williams requested council give consideration to doing something to aid in moving the Health Nurses into a larger facility. He spoke with the Health Nurse and was told the State has told her the only way to get a new facility would be if there is a broad outcry of support from the community. The community would have to support the request for a new facility. He requested council to consider bringing together all the 40 • KENAI CITY COUNCIL BUDGET WORK SESSION APRIL 10, 1996 PAGE 3 elements to show a new health center is needed, does a tremendous community service, and does deserve the support of the state to build a new facility. To that end, the $20,000 requested above, may be needed. The city may consider offering land, financing arrangements, etc. However, care must be taken to not lose the nurses from being stationed in Kenai; impress upon them we need them and don't want them to leave Kenai; but, that they really need their own facility. E 'ERPRYSE FUNDS: Boating Facility - Williams noted the fund had been in trouble for some time. There are extensive repairs needed. Sweeney stated he changed the manner of budgeting for the enterprise funds slightly from how they were done before. Before, they were based on an accrual basis so that cash outlays that were not necessarily an expense, or budgeted for directly, were budgeted for as depreciation. The Finance Department thought it • would more clear to budget to show the actual amounts being spent. To show that, he prepared a pro forma financial statement to give an idea of what the financial situation would be. Sweeney reviewed the revenue summary and noted that the outlays were over the intake by approximately $52,000. This would decrease the amount of working capital to approximately $4,000 at the end of this year. Kornelis noted that after the budget was turned in, one of the pilings was found to be bent badly from ice damage. It will have to be repaired. Williams noted there was only $9,500 budgeted for repair and maintenance and added, that would probably not cover the cost to repair the piling. Kornelis agreed it would not be. Kornelis added, some discussion had been given to filling the pilings with concrete which would be more costly. Councilman Bookey reported the Harbor Commission discussed the matter. Bookey asked if the dock could be run with the piling in that condition. Kornelis stated he didn't know, but believed it was safe enough to operate and could have steel shims placed under it. Kornelis added, the bid opening for the dock space was next week and that the minimum bid amount was lowered. Williams stated, without consideration of the heavy maintenance cost, it may be necessary that the budget could only be met with the infusion of $52,000 in capital from KENAI CITY COUNCIL BUDGET WORK SESSION APRIL 10, 1996 PAGE 4 the fund balance. That would put the fund balance dangerously low. Council would have to do some though thinking on this one as there probably won't be a very good fishing season this year. Sweeney stated that the basis of an enterprise fund is to allow some chance to make a profit. If it is decided it cannot make a profit, the nature of the fund could be changed to a special revenue fund or bring it back into the General Fund as a department. Williams noted the dock problems (profits and losses) reflect the fishing seasons. Councilwoman Swarner asked if there had been any interest in renting out the docks. Kornelis answered there had been some. He sent out a flier but not many bid specifications were requested. Swarner stated she was concerned about making transfers from the General Fund to the Dock Facility. Williams stated nothing could be done until it was known how much it would cost to repair the piling. . Councilman Moore asked what the revenue side of this fund was. Williams answered the first three years it was good, but then there was a slump, driven by the slow fishing seasons. Moore noted there should be a peak in tourism, and suggested the boat launch fee be raised. Bookey stated the Harbor Commission also discussed raising the fee. The Commission and Administration encourage not raising it. He, however, thought it should be raised. Kornelis noted this budget had been prepared prior to the setting of the dipnetting season. Williams stated he would not want to force potential users of the dock to go upstream where there would be no cost. Cause for the concern was also the overuse of Cunningham Park and the damage to it. Bookey stated he didn't think that would happen. Moore suggested a $5.00 campground fee for RVs -- $5.00 to launch the boat and $5.00 to park the RV for a certain amount of time. Bookey agreed and added, the increase of people using the dock would also increase the use of the bathroom and well. Kornelis noted the budgeted expenses went up -- administrative costs were taken out last year and this year. Transfers out will be $20,000 next year. Williams noted that still left a $300,000 loss. Manninen stated the raw fish tax was credited to the General Fund. Williams stated the fish tax was to take care of sunvner time costs attributable to the fishing season, like extra police, etc. It would be up to the accounting processes to utilize some of that money in support of the fishing industry. Measles stated that • KENAI CITY COUNCIL BUDGET WORK SESSION APRIL 10, 1996 PAGE 5 looking at it that way, the fish tax wouldn't come to the city if the dock facility wasn't there. The fish tax is directly related to the dock facility. Williams requested Manninen contact Mayor Gilman or the Horner Mayor Gregoire and get a copy of the resolution about fish tax Homer has passed. Their suggestion is to change the mechanism of the fish tax ordinance which pays fish tax to the port of processing to the port of landing. They hope to encourage fish processors to move to Homer. Manninen was asked to see how Homer's suggested change would affect the City of Kenai. Kornelis stated he had a discussion in regard to this and found the value of the fish tax to the City of Kenai is because of where the fish is unloaded. If the fish tax is determined as to where the fish is processed, the city will lose a lot of the tax monies. DIRECTION: Manninen was requested to get information on Homees resolution • requesting change of who receives the fish tax and determine i e how the change would affect the City. Discussion followed in regard to fuel sales. Measles asked why petroleum sales were separated at revenue and lumped together in sales. Kornelis stated the sales included $5,000 for fuel to sell; $5.000 for miscellaneous costs, i.e. safety equipment, foul weather gear, oiligrease that the city uses. $56,900 was included in fuel sales under revenue. Measles stated the margin on the fuel didn't seem right. Sweeney noted if the fuel -sales remained the same, the outlay would drop. Kornelis added he usually gets 2696 higher than what it is purchased at. They could lower the expense to $40,000 and raise the revenue. Swarner noted that if it is under expense, it could get spent for other items. Kornelis stated he wanted tito spend as much of the fuel as he can as 26% of the cost is revenue. DIRECTION: Decide on the accounting method of the dock facility and the fish tax Issue (whether it should be attributable to the dock facility or the area as a whole) at the next work session. Kornelis stated he would write a memo in regard to the information he received. Airport Terminal Fund - Airport Manager Ernst reported the big items in the budget were for Repair & Maintenance, the replacing of the sliding electronic doors. The amount included in the budget was from a quote he received. q All other budgeted costs •KENAI CITY COUNCIL BUDGET WORK SESSION APRIL 10, 1996 PAGE 6 remained much the same as last year. Ernst added, he would prefer using the same type of sliding glass doors as putting in something new would mean major renovation. Ernst stated he did not see a change coming in car rental agencies. Williams asked if there would be change in design from the elimination of the one car rental agency star"s use. Ernst stated he investigated making the other rental agency spaces larger, but it would mean a major renovation. The counters, etc. were recently renovated. It could be left open and could be made available for an air tax service or bid it out to a fish guide, etc. Ernst added, he had already put the Budget Car Rental Agency on notice that they may need to move down one stall. The Kangas operation could be moved into the open space too. Swarner asked if enough was budgeted for janitorial services. Ernst noted the amount • was higher than last year's budget. The reason for the raise was due to the contract needing to go to bid this year. Last year the contract cost was $33,000. Discussion followed as to the frequency of the snow being removed ;rom the sidewalks, etc. Ernst explained they shovel snow as needed. He added, there was a person who fell during the winter inside the foyer. The build up of ice was an oversight of both he and the janitors. They now watch closely for the same problem to happen. It was hard to prevent as ice melt cannot be placed on the air side of the terminal due to the corrosiveness of the material. Sweeney noted the budgeted $84,000 in outlays. He explained that in previous years depreciation was done. He pulled the depreciation out. The costs are in contingency this year. DIRECTION: No changes. Congregate Housing, Fund_ - Williams opened the discussion in regard to the budgeted $9.00 rent increase which would amount to $4,320 a year in additional revenue. Williams asked why the rent increase was needed. Sweeney stated there was a drop in the amount of profits to be transferred from the facility to the General Fund. Last year $2,370 was transferred out. This year it would be • KENAI CITY COUNCIL BUDGET WORK SESSION APRR.10, 1996 PAGE 7 $2,392. Without the increase in the rent, the amount transferred to the General Fund would drop. They are trying to stabilize the transfers to the General Fund. Williams stated he did not like transferring out of the General Fund. The original agreement was to set up a reserve account for replacement of carpet, etc. He did not think it would be necessary to raise the rent to make an increase of $9,000, especially when it was decided in the beginning that the rent would not raise until after five years. Senior Center Director Porter explained that five people who live in the facility use ASHA certificates. Rent cannot be raised on ASHA certificates more than one percent over the rent certificate. The raise in the rent must be done gradually or those on ASHA would have to be evicted. ASHA has lowered the amount of rent to be paid. She has had to write letters requesting exemptions for new people moving in on ASHA. $99000 is what ASHA would allow. The tenant is not allowed to make up the difference. • The $9.00 raise would allow the five tenants to stay. If the rent is raised again next year by $9.00 it would be legal. She spoke with ASHA and this is the percent of a raise they would allow. In the future, rent certificates should not be accepted as it ties the City to what they can and cannot do in regard to rental raises. Porter added, she brought this to council's attention as it may be a big problem in the future. Manninen stated that if the City doesn't act now it may be precluded from raising the rent in the future. Porter also noted that in the original housing facility budget, nothing was included for administrative costs. Now, one quarter of her salary comes from the housing budget. DIRECTION: No objection to raising the rent $9.00 a month. No changes. MUST AND AGENCY FUNDS: Land Sales Trust Funds Summary - Sweeney explained these were interest on the contracts which comes in as revenue and is transferred out to either the General Land Sales Trust Fund or the Airport Land Sales Trust Fund. DIRECTION: No changes. 0 . KENAI CITY COUNCIL BUDGET WORK SESSION APRIL 10,1996 PAGE 8 SPECIAL REVENUE FUNDS -hater and Sewer Fund - Sweeney explained both the expenditures and revenue rose. The rise in revenue was because of bringing Thompson Park on line. Bringing those homes on line and drilling the new well created a lot of expenses. The net result was almost a balanced budget on a cash -in, cash -out basis. The expenses continue to rise. They may want to look at the rate structure and consider a raise in the rates, They believe the rates are sufficient for this year, however, if a major expansion is made to the plant, raising the rates will need to be considered. DIRECTION: No changes. Water - Kornelis explained a lot of the increases in the budget were caused by the new well. Operating supplies were also up from last year due to the use of the hypochlorite which is more expensive, but safer. Utilities are also up because of the new well. Purchase of a backhoe was taken out. Rental fees (for a backhoe, as needed) were included. Swarner questioned the cost for new notices for doors, etc. Kornelis explained they are purchased about every three years. DIRECTION: No changes, e e - Kornelis explained the office supplies were increased due to the cost of the notices (this cost is split between water and sewer). Two houses in Inlet Woods will be added to the system and a lift station will need to be added. They weren't there when the telemetry system was put in place. DIRECTION: No changes. Sewer Treatment Plant - Kornelis explained the biggest increases in this budget were for the price of chemicals in the operating and repair/maintenance supplies. The hydrochloride is more expensive, but not as much is needed. According to the minunum government standard, they are not required to use it, but if they don't, they have problems with algae in the lines. Kornelis added, no fluoride is added as the water has an amount of natural fluoride in it. DIRECTION: No changes. •KENAI CITY COUNCIL BUDGET WORK SESSION APRIL 10, 1996 PAGE 9 Airport Land System Fund - Williams reported that during their meetings with the Fire Chiefs, etc., they talked about financing of the ARM It was his understanding that as much as 93% of the construction costs would be paid with Alp funds. 'The ding remaining seven percent would be split between the city and the state. That would amount to either $3509000 or $1759000 each. They were all concerned whether the state will pay their $175,000. He told them the city would pay the $350,000 themselves if needed. Ernst added, the funding for the ARFF would be from discretionary funds. DIRECTION: No changes. AftIP- o aintenance & Oreratians -Ernst explained they will be needing to paint the runways, etc. However, there was no significant expenditures in this budget. Ernst reminded council, the training foam and cutter/spreader were taken out of this budget and included in the Fire Department budget. The fence repairs will be mad the northwest corner where the fence is down. a to Bookey questioned the camping fees in the Airport Land revenues, askin how muc spent to get the camping area ready. Ernst answered, a minimal cost. g h was Williams noted that usually $5,000 is budgeted for machinery and equipment. This year, only $19000 was budgeted. Ernst stated he didn't think there would be need foradditional equipment. Ernst also pointed out the return on the revenues was u to about $16 million. P DIRECTION: No changes. Williams reported he requested administration and the Clerk to keep track of all Promoting the ARFF because they believe it can be attributed back to the ai o and b reimbursed. rP e Land Sys M intenance & Ar bons - No changes. Airport Admlinistrat on - Ernst reported he would be purchasing a new computer and changing from his MAC to a PC. The dot matrix printer will Print his own purchase orders. P be used to • KENAI CITY COUNCIL BUDGET WORK SESSION APRIL 10, 1996 PAGE 10 Ernst added, there may be some additional costs in regard to travel promoting the ARFF. DIRECTION: No changes. AirportO- ratin Budget - No changes. Senior Citizens Title III Grant Fund - Porter reported she discussed raising the range for her assistant to a Range 10 with both Sweeney and Manninen. Porter explained that when the new classification study was done, she was hoping her administrative assistant position range would change. This position was one of the employees that the study said needed to be addressed at budget time. Manninen recommended to move the position from a Range 7 to a Range 8. When she first found the study recommended the position to be raised, she contacted Sweeney and asked him in the point system, where this position would fall. Sweeney told her it fell in the mid • range for a Range 10. Porter continued this was the first time this position had been reevaluated in many years and she feels that in comparison to other employees in the city and how they were rated and what their job duties were, that this position should be a Range 10. When she developed her budget, she figured the position at a Range 10. After that, she found out it was only recommended for a one step increase. She spoke with Manninen and Sweeney. Manninen agreed to allow her to request the position be charged to a Range 10 in her federal grant because that is where her money comes from. She explained that if she included in the grant the position was at a Range 7 or 8 and it was then changed in the future, she would not be able to go back and ask for more funding to cover the raise in the range. Manninen allowed her to put the position at a Range 10 in the federal grant. Porter requested council to revisit this position range, comparing the job responsibilities to others in the city. Those responsibilities include supervising four people; assume Porter's responsibilities when she is absent, which includes operating a multi -million dollar facility and the housing facility; people responsibilities, life responsibilities, etc. Porter requested council's consideration to raise the position to a Range 10. 0 . KENAI CITY COUNCIL BUDGET WORK SESSION APRIL 10, 1996 PAGE 11 Porter explained the process of her budgets, i.e. writing the budget first and then in May and June finding out what funding she will receive .from the federal government, as well as United Way and the Borough. After finding out those amounts, a revised budget is done. Porter added, she believes this year they will be federal government, and feels secure for Boroul also requesting more fees from clients too. receiving sufficient funding through the h and United Way funding. They are DIRECTION: Revisit administrative assistant position -- changing from Range 8 to Range 10. No other changes. Manninen stated, the Range 8 was what the work group recommended. Senior Citizen Access - No changes. , Con r t e is - No changes. ._...._._ Senior Citizenraps a 'o -No change. Senior Citizen pigment - No changes. Council on Age - Borough - Porter explained this budget is a combination _of United- Way, the Borough and private donations. Bookey asked Porter if she was fairly comfortable that this amount would be received. Porter answered, yes. Swarner asked how the rental of building projections were. Porter answered the rental of the bw1ding was going really well. If they continue as they have been it will be even better. At this time they were $3,000 over what the projected rental income was in last year's budget. Porter added, she budgeted a little more than this year. Porter added, they were already making bookings for Christmas. She believes the rental of the building is really good for the city because it brings a lot of people into the city -- people from Soldotna for wedding receptions, etc. Williams questioned the amounts for the rents which were listed in the budget document The budget began with a the amount of $13,000 in 1994; $16,000 in 1995; an original is budget of $16,000 in 1996; it was amended to $12,000 and then showed taking in an KENAI CITY COUNCIL BUDGET WORK SESSION APRIL 10, 1996 PAGE 12 actual amount of took in $162 to date. Williams added, the total rents and leases through March 1 was listed as $162. He did not think that was correct. The same error occurred on pages 223 and 224. Porter stated she believed it was probably a total of $16,200. Sweeney reviewed his information and stated the amount should be $159000 in rents to date. Williams requested Sweeney to check his computer because there definitely was an error and he was not sure what that would do to the rest of the figures on down. DIRECTION: Sweeney to review the figures and correct. No other changes. DEBT SERVICKFUNDS: Williams stated the one thing not included in the document was the total amount of remaining debt. Sweeney stated it was included in the letter. Williams asked if the 1%7 bond was a twenty-year bond and would it be retired in FY97. Sweeney stated he did not have the debt service schedule with him and thought it might be. Williams requested the remaining debt information in the budget document -- the remaining debt on each individual bond and a remaining balance on all of the bonds. Sweeney stated he believed the retirement date of the 1967 bond was September 1, 1997. Williams requested that information be reviewed. Sweeney stated he would have the information for the next work session. DIRECTION: Sweeney to provide the remaining debt information In the budget document -- the remaining debt on each individual bond and a remaining balance on all of the bonds. The information should be available for the next work session. Williams noted the 84/86/93 bond issue debt service fund was all in one fund as it was the one that was refinanced due to a lower rate, providing it would be taken to full term. Williams asked if the city would be retaining the amortization of the bond and to be paid off in 2004 or was the final payment date pushed ahead when it was refinanced? Sweeney answered the payment schedule does go past 2004. He will put the information in the next packet. Sweeney added, in the 94/96/93 bond, there were a number of special assessment payments being made serving as revenue to the fund. What has happened in the past • KENAI CITY COUNCIL BUDGET WORK SESSION APRIL 10, 1996 PAGE 13 r] and what was done this year is the budget for that revenue will pay off the negative fund balance. It's theoretically available to pay the debt service. Williams stated that when and if a settlement is ever reached in the Inlet Woods issue, there will be a large payment due the Borough. Attorney Graves stated the number was previously calculated by be and Finance Director Brown. It could be recalculated for next meeting. DIRECTION: IMIliams requested the calculated amounts for amounts that will need to be paid to the Borough when the Inlet Woods matter is settled for the next work session. DIRECTION: Williams requested the color copier be put back into the budget. He looked at some in Anchorage. The one he had in mind is a Hewlett-Packard that would cost $29500 instead of $000. This would equate to approximately $.17 a copy. Copies from local businesses cost approximately $1.50 each. Williams suggested sharing the cost with the Airport. BUDGET SCHEDULE: Freas reported Mayor Williams suggested having an additional work session on Tuesday. April 23 instead of the 18th as Williams, Swarner, Manninen and Moore would not be able to attend. It was also. determined that Smalley would not be available nor would be the Senior Center or council chambers. April 24 was suggested and determined to be a better day. Swarner stated she would not be able to attend on the 24th. Sweeney reported he would not be able to attend on the 24th. The work session was scheduled for 7:00 p.m., Wednesday, April 24,1996 at the Senior Center. Swarner referred to the Christmas light information McGillivray distributed at the beginning of the session. McGillivray indicated what lights they were considering in the catalog. Discussion followed, however no decision was made during the work session. KENAI CITY COUNCIL BUDGET WORK SESSION APRIL 101, 1996 PAGE 14 The work session adjourned at approximately 9:00 p.m. Notes prepared by: Carol L. Freas, City Clerk • •