LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE
The Legislative, Finance, and Administration Committee meeting was held on June 23, 2008 at 6:00 p.m. with Councilman Salters presiding in the absence of Chairman Slavin. Members present were Mr. McGlumphy, and Dr. Jones. Mr. Shevock was absent. Other members of Council present were Mr. Leary, Mr. McGiffin, Mrs. Williams, Mr. Ruane, Council President Hogan, and Mayor Carey.
AGENDA ADDITIONS/DELETIONS
Mr. McGlumphy moved for approval of the agenda, seconded by Dr. Jones and unanimously carried.
Financial Policy Review
Members were provided a revised Financial Policy for their consideration. Mrs. Mitchell, Controller/Treasurer, reviewed a presentation of the Financial Policies and proposed changes. She reminded members that the goal is to achieve the objectives of the policies without placing fiscal hardship on the City or its citizens. Mrs. Mitchell also reviewed proposed amendments to the Finance Department Procedure for Budget Administration - Guidelines for Operating Departments. She explained that this procedure is intended to permit the redistribution of funds in departmental budgets and establishes the procedure to be followed when the approval of a supplemental appropriation is requested. It restricts the redistribution of capital outlay accounts.
Responding to Mr. Ruane regarding the Electric Rate Stabilization Reserve, Mrs. Mitchell stated that if the City were able to accumulate10% of the purchase power costs, the excess amounts would be available to prevent a higher rate increase. Mr. Ruane suggested that the policy include a statement indicating that if the balance exceeds 10% of the purchase power costs in any given year, the difference would be utilized to lessen the percentage of rate increase necessary for that year. He felt that this would provide an understanding that the City would not accumulate balances. Mrs. Mitchell assured members that such an affirmative statement would be included in the Policy.
Mr. Ruane questioned if staff conducts periodic reviews of the incentives provided by the City, feeling that there should be standardized time-frames established for reviewing revenue losses as well as gains. Responding, Mrs. Mitchell indicated that there are no required reviews of the incentives included in the Financial Policies. Mr. Ruane recommended that the Controller/Treasurer review this issue and submit a recommendation for a periodic review of incentives due to their annual and long-term impact on the budget.
Referring to the Revenue Policy, Page 2, Item 10 - Operating Transfers from Utilities to General Fund, Mr. Ruane relayed his concerns regarding the use of a percentage of utility operating revenues, particularly in today’s market.
In response to Mrs. Williams regarding the proposal for eliminating Council’s approval of budget ordinances for budget revisions, Mrs. Mitchell explained that any budget revision requests that are within the parameters of the budget amendment procedure and Charter guidelines must be approved by both the City Manager and herself as Controller/Treasurer. Therefore, she felt assured that there is adequate control and the need for Council’s approval is not necessary; however, if a request is not within the parameters of City procedures or Charter guidelines, then Council approval would be necessary.
Referring to Mr. Ruane’s comments regarding the use of a percentage of the extra funds from the utilities to be transferred to the General Fund, Mrs. Mitchell advised members that she conducted the calculation in the forecast model from fiscal year 2009 to 2013 and determined what those transfers would be increased (by a percentage) due to the revenue increasing. She stated that in fiscal year 2009, that increases the General Fund revenue to $429,000 and in 2013, to $635,000, which is representative of the 6½% and 4½% from the utilities increase. Mrs. Mitchell noted that the City has capital asset reserves funded for asset replacements. The City Manager has explained that when a new water or sewer line is installed, the streets are damaged. Since the General Fund pays for street improvements, she stated that it is the City Manager’s opinion that the transfer allows for the utility to help recover some of the costs that it created. Concurring, Mrs. Mitchell advised members that she planned to suggest that the increases be earmarked to go to the capital asset reserve for recovering such costs; however, this suggestion has not been included in the policies at this time.
Due to time constraints, Mr. Salters suggested acceptance of the report for further discussion. For clarification, Mr. McGlumphy indicated that as a result of the explanation provided regarding the transfer of funds from the utilities to the General Fund, members will have additional questions of the Controller/Treasurer and the City Manager.
Dr. Jones moved to recommend acceptance of the report for further discussion, seconded by Mr. McGlumphy and unanimously carried.
2008 Comprehensive Plan Review: Growth and Annexation Plan, Land Development Plan, and Economic Development
Mrs. Townshend, Director of Planning and Inspections, provided members with Chapter 10 - Economic Development, Chapter 9 - Transportation, Chapter 12 - Land Development, and Chapter 13 - Growth and Annexation of the 2008 Comprehensive Plan Update for their review.
Dr. Jones moved to defer consideration of the 2008 Comprehensive Plan Review until the next meeting, seconded by Mr. McGlumphy and unanimously carried.
Mr. McGlumphy moved for adjournment, seconded by Dr. Jones and unanimously carried.
Meeting Adjourned at 7:02 P.M.
Respectfully submitted,
Reuben Salters
Acting Chairman
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