COUNCIL BUDGET HEARINGS
Members of Council met in budget hearings on May 23, 1995 at 7: 00 p.m. Members of Council present were Council President Christiansen, Mr. Salters, Mr. Tudor, Mr. Lambert, Mr. Leary, Mr. Fenimore, Mr. Pitts, Mrs. Malone, Mr. Hare and Mayor Hutchison. Civilian member of the Legislative and Finance Committee, Mr. Bill Schaefer, was also present.
Mr. Salters, Chairman of the Legislative and Finance Committee, explained that the proposed budgets were prepared by the City Manager, Finance Director and Administrative Ser-vices Director with assistance of City staff from the various departments. As in the past, close scrutiny to details and a fight-fist approach has been followed in the preparation of the budget. As required by City Code, all budgets are balanced and the Code requirement for 2 % of the bud-et to be kept as Contingency Reserve for the General Funds and Water/Wastewater Fund has been met and exceeded with a reserve of $460,000 (3.5% of bud-et). General Fund revenues have increased by $342,000 which reflects growth while operating expenses have increased by approximately 3 %. A total of $260,000 has been put aside for future debt service. A full year for the Water Treatment Plant has been budgeted for 1996 totaling $620,000. Water and Sewer Fund capital needs have been funded at the level of $660,000. Total electric revenues are $48 million with operating- expenses, including debt service, amounting to $36 million. This generates an operating cash level of $12 million, of which $7.4 million will be put back into the electric system by way of improvements and extensions. A total of $3.7 million will be transferred to the General Fund. A new Utility Construction Department is funded for next year and the City Manager's evaluation is due in six months which will assess the activities in the new department. All debt service payments are fully funded. The budget calls for no property tax increase and from a general standpoint, the City's operations are efficient. However, it is imperative that the City tighten its belt on cost control, especially in the area of personnel which is an area that can raise havoc on a budget if not tightly contained.
Mr. Salters reminded the public that members of Council have had copies of the budget for several weeks and have had an opportunity to have questions addressed by the City Manager or the involved department head prior to the budget hearings.
Mr. James O'Connor, City Manager, expressed appreciation to Mike Karia and Terry Tieman for the preparation of the budget and to all department heads that worked diligently to keep their budgets as low as possible. All budgets were prepared under the premiss that there would be no property tax increase and no sewer rate increase. The recent water rate increase will cover the operation and maintenance of the new water plant. The electric rate structure is being reviewed for possible revision to keep us competitive and to maintain fair and evenly structured rates. Mr. O'Connor discussed the possible savings from utilizing City crews to perform work that typically was subcontracted in the past. The new computer systems should reduce our costs in processing utility bills and the new billing system for water and electric service should improve cash flow, thereby improving the rate of return on the City's investments. The City is reviewing its fleet management system but Mr. O'Connor is not prepared at this time to make a recommendation. It is budgeted as though it will continue to be contracted to a private firm but the City may take over this function. He is stressing the utilization of employees in the various functions within the City so that the citizens are being well served by a competitive work force. Employees are working together in problem solving techniques and overall the total organization has fewer employees today than two years ago. Mr. O'Connor reminded Council that the key is not the total number of employees, but the functions that are being carried out and the productivity of the employees.
Mr. O'Connor stated that the budget contains funding for projects that the City of Dover has been involved in during past years. One of the projects, the Dover Arts Council, was funded in the budget at a level of $10,000. However, the Dover Arts Council has requested a funding level of $15,000. He suggested that Council determine if the Dover Arts Council is a project that will continue to receive funding and at what level it will be funded. If the project is continued, Mr. O'Connor suggested that the Arts Council Director, who is a City employee, be given more flexibility so they can be incorporated into other areas and permitted to function more as a City employee. The current funding level of $10,000 pays a percentage of the Director's salary with the remaining funding coming from the Arts Council. Mr. O'Connor suggested that the funding level of $10,000 remain as budgeted and if it is determined that the additional requested $5,000 is needed, a requested budget amendment could be presented to Council.
There was considerable discussion on the Dover Arts Council and the function of its Director. The Arts Council grant terminates in December 1995 and if funding terminates, the program could be in jeopardy. He suggested that the Director be channeled to perform a variety of functions within the City and then a staff member would act as liaison staff member to the Arts Council. Mr. Hare objected to the Director being employed by the City of Dover, which entitles him to City benefits such as health care and retirement. He felt that this employee should be an employee of the Dover Arts Council similar to the way the Main Street Director is directly employed by Main Street. Mr. O'Connor explained that previous actions of Council accepted the position as an employee of the City of Dover.
Mr. Christiansen moved to recommend that the City provide funding to the Arts Council as currently budgeted at $10,000 and that the Arts Council Director serve as a Community Services employee to perform functions as directed by the City Manager. (It is understood that the City will provide staff support to the Dover Arts Council.) The motion was seconded by Mr. Leary and unanimously carried.
Mr. Tudor questioned the City Manager on funding in the proposed budget for programs or projects that are already completed. Mr. O'Connor explained that some projects are funded over more than one budget year and some projects are started in the current fiscal year, but not complete and paid for until after the new fiscal year. In some rare instances, a department head may have included an expense in a proposed budget, but is forced to expend the funds sooner than expected due to unforeseen circumstances such as equipment failure or an unexpected need for the project. In some instances this emergency matter is taken care of with funds from the current year budget and the delayed project will be taken care of with funds from the proposed budget. He emphasized that this is not the normal procedure and is only done when emergency situations require it. He also reminded Council that staff must prepare proposed budgets nearly one and one-half years in advance and it is extremely difficult to project an exact budget that far in advance.
Mr. Tudor asked what happens to funds in instances where a projected cost is higher than the actual cost. Mr. O'Connor stated that there are instances where the funds will be transferred to cover some other unexpected (unfunded) expense. This type of transfer is approved by Council by the way of a budget amendment. The second alternative is that the funds are included in the carry-forward balance for the next fiscal year budget. Mr. O'Connor also explained that projects are prioritized by staff and in some instances the project may be held off until the next fiscal year. In this type of instance, the funds will show in the carry-forward balance and the proposed expense will be included in the departmental budget.
Mr. Tudor stated his appreciation that the proposed budget contains no tax increase, but also expressed concern with the above mentioned matters where some projects are budgeted for in the next fiscal year but the project is on-going during the current fiscal year. He requested that in the future, some notation be made in the budget to show Council which projects have been started and/or completed and if a project has a priority for completion. Mr. Hare felt that City Council should give the City Manager the parameters for the budget, such as staying within a certain dollar range, no tax increase, no rate increase, etc. It was his opinion that as long as the City Manager stays within the mandated parameters, it should make very little difference if he feels the need to shift funds or programs.
Mr. Leary noted that the City's health care program costs are on the rise and he suggested that this be reviewed for possible alternatives prior to the budgetary process for next year.
Responding to Mayor Hutchison, Mr. O'Connor stated that he feels very comfortable that the Information Services Department will be able to meet their stated goals within the next fiscal year. Referring to questions by Mr. Fenimore on the City's Fleet Management, Mr. O'Connor stated that the City has officially notified Ryder that we intend to terminate our contract and that we plan to look at options and alternatives. He has not yet determined if the best alternative would be to utilize City staff or to utilize some combination of City staff and private firms. The City has until June 20th to exercise the option to renew the contract with Ryder. The City Manager will relay all information to Council as soon as a proposal is prepared.
Mrs. Malone asked if the Human Resources Department has completed job descriptions and classifications for all positions and if the comparative range surveys are complete. Mr. O'Connor stated that the survey is complete and job descriptions are complete. He cautioned Council on relying heavily on comparative range surveys, stating that it is very difficult to determine if a job title for one position carries the same job responsibilities of a position with another City with the same job title. He stated that overall, the City of Dover salaries fell within the middle of the range of those responding to the salary comparisons.
Mr. Fenimore commended the City Manager in his goal to cross train employees so that an employee is capable of performing more than one function. He asked, however, if personnel problems could arise on personnel classifications issues. Mr. O'Connor agreed that possible problems could occur, but he believes that diversity will be the key to success for the City and for the employees and he will work diligently to make it successful.
Referring to the Parks and Recreation Department, Mr. Salters stated that the programs are basically fee driven. He suggested that some consideration be given to the City contributing more to ensure participation by those that cannot afford to pay the fee. Although he agrees that some programs should be self-sufficient, he feels that the City has an obligation to provide free recreation to the youth of our community. Although he did not disagree with Mr. Salters' suggestion, Mr. Christiansen cautioned that increased expenses in this Department has led to decreased programs in the past. Mr. Christiansen suggested that Mr. Salters work with the
Recreation Department for assistance in situations where someone is being deprived from participation due to a lack of funds.
Mr. Hare moved to recommend acceptance of the proposed 1995/96 bud-et as presented. The motion was seconded by Mr. Leary and unanimously carried. Mr. Hare moved that the budget hearings scheduled for May 24 and 25, 1995 be cancelled, seconded by Mr. Leary and unanimously carried.
Mayor Hutchison relayed appreciation to City staff and City Council in their diligent work on the proposed budget. Council President Christiansen reminded Council that a public hearing is scheduled for June 12, 1995 for the Electric Fund Bud-et. A first reading of the proposed budget ordinances will take place during the Council Meeting of June 12, 1995 and the final reading will occur during the Council Meeting of June 26, 1995.
Mr. Hare moved for adjournment, seconded by Mr. Leary and unanimously carried.
Meeting Adjourned at 8:44 P.M.
Respectfully submitted,
Robin R. Christiansen
Council President
RRC/DJB