CITY COUNCIL MINI BUDGET ADVANCE
THURSDAY, JANUARY 22, 2015
CITY COUNCIL CONFERENCE ROOM
211 WEST ASPEN AVENUE
1:00 P.M.
 
MINUTES
 
               
1. Call to Order
 
  Mayor Nabours called the City Council Mini Budget Advance of January 22, 2015, to order at 1:06 p.m.
 
2. Roll Call

NOTE: One or more Councilmembers may be in attendance telephonically or by other technological means.

PRESENT:

MAYOR NABOURS
VICE MAYOR BAROTZ
COUNCILMEMBER BREWSTER
COUNCILMEMBER EVANS
COUNCILMEMBER ORAVITS
COUNCILMEMBER OVERTON
COUNCILMEMBER PUTZOVA
ABSENT:

NONE






 
Others present:  Interim City Manager Jeff Meilbeck.
 
3. City of Flagstaff Mini Budget Advance   
 
A. Overview
 
  Mr. Meilbeck stated that the purpose of the meeting is for Council to consider budget issues and give direction to staff on how to move forward with drafting the budget.
 
Mr. Meilbeck provided a PowerPoint presentation that provided information and covered the budget advance. A copy of the presentation is attached for reference and additional information.
 
B. Council Mission, Vision and Goals
 
  Mr. Meilbeck explained that the mission and vision of the City tie into the goals that were set by Council in December. The Council goals for this term are:

  1. Invest in our employees and implement retention and attraction strategies
  2. Ensure Flagstaff has a long-term water supply for current and future needs
  3. Provide sustainable and equitable public facilities, services, and infrastructure systems in an efficient and effective manner to serve all population areas and demographics
  4. Explore and adopt policies to lower the costs associated with housing to the end user
  5. Develop and implement guiding principles that address public safety service levels through appropriate staffing levels
  6. Relieve traffic congestion throughout Flagstaff
  7. Address key issues and processes related to the implementation of the Regional Plan
  8. Improve effectiveness of notification, communication, and engagement with residents, neighborhoods and businesses and about City services, programs, policies, projects and developments
  9. Foster relationships and maintain economic development commitment to partners
  10. Decrease the number of working poor
  11. Ensure that we are as prepared as possible for extreme weather events
 
C. The City's Financial Framework - A Model for Stability and Success
 
  Mr. Meilbeck explained the framework for stability and success through asking where the organization is, where it wants to go and how it get there.

  • DEMAND
  • DEMANDS FOR CITY SERVICES
  • SUPPLY
  • POLICY QUESTIONS
 
D. Revenue Options
 
  Management Services Director Barbara Goodrich continued the presentation.

  • REVENUE OPTIONS
Vice Mayor Barotz stated that recreation fees were just increased. Ms. Goodrich explained that the increase that is being represented in the slide is the third year of three increases. She also stated that there is a rate study going on for Utilities and Stormwater right now.

  • GENERAL FUND TRANSFERS/REALLOCATIONS
 
E. Mini Advance Framework
 
  Mr. Meilbeck continued the presentation.

  • REMINDERS
  • OBJECTIVES
  • MINI BUDGET ADVANCES
Vice Mayor Barotz asked for additional information on what the primary property tax would look like for a $300,000 and $200,000 home as well as the secondary tax.
 
Vice Mayor Barotz also asked for lease rates for the various leases the City has. She stated that any leases coming up for renewal should be reviewed to make sure that the lease rate is at market. Councilmember Oravits asked Ms. Goodrich to please include commercial leases and property taxes as well.
 
She also asked for more information about liquor licenses to understand what the City takes in and how that relates to other municipalities. Councilmember Evans stated that in regards to Liquor Licenses the City assesses a one-time fee but not an annual or renewal fee. There are a lot of problems associated with the maintenance of liquor licenses and she would be interested in learning more about an annual or renewal fee to help assist the Police Department in addressing issues with bars.
 
Councilmember Putzova asked if there were any other revenues that were not listed in the presentation that the City has not historically taken advantage of. Mayor Nabours stated that during the December budget retreat the Council brainstormed different revenue sources and asked that the list be reviewed to see if there was anything on there that might be a possibility. Ms. Goodrich stated that staff will evaluate the list and bring back anything that might have been missed.
 
Mayor Nabours stated that Community Development fees were raised last year. Ms. Goodrich stated that they were raised but in isolation. The City has wanted to increase its fee recovery which is why a broader discussion is needed.
 
Councilmember Putzova asked if using funds from the ongoing fund balance would negatively affect that City’s bond rating. Ms. Goodrich stated that the bonding companies are looking at the City’s unencumbered fund balance.
 
Councilmember Oravits asked if there are any projections on fuel cost savings. Ms. Goodrich stated that staff has not done any projections yet and that is coupled with how long term the savings will last. Councilmember Oravits asked if they could look at the short term and stay conservative.
 
Mayor Nabours asked if one-time monies are considered fluctuations in state shared revenue and not something that can be relied upon in the coming years. Ms. Goodrich agreed and added that staff considers things like HURF not funding DPS as they were for three years and vehicle sales being unreliable year to year.
 
Ms. Goodrich stated that the City has had a structurally balanced budget since 2012. One time monies have been used to enhance training budgets and other increases in service levels but they are very specifically categorized and separate.
 
Councilmember Evans asked if there are any legal restrictions for what the fund balance can be used for. Ms. Goodrich stated that there are no legal restrictions included in the five year plans.
 
Councilmember Overton stated that he is not comfortable going to 12% or 15%; he asked if there is a point where it really begins to affect the bond rating. Ms. Goodrich stated that she is willing to ask that question. The reality is that the City does under spend and does carry forward projects. Where the bond companies are going to get nervous is when they see reductions. But if the fund balance is reduced with a plan, it is better understood and received.
 
Mayor Nabours added that as the City has to disclose its pension liability, he asked if a bonding company is going to look at that and want to see more unrestricted funds. Ms. Goodrich stated that she posed that same question to the City’s financial advisor and is awaiting a response. The City will be issuing more debt by the end of the year and she would like to know if it is the advisor’s opinion that the City go now or wait. The entire country is in the same boat. She feels that as long as the City continues with strength in other areas it should be okay so long as there is an achievable plan in place going forward.
 
           
F. Mini Advance #1: Employee Investment
 
  Ms. Goodrich continued the PowerPoint presentation on Employee Investment.

  • EMPLOYEE PENSION
  • PROFESSIONAL DEVELOPMENT
Vice Mayor Barotz asked if there is a reason that uniforms are included in professional development. Uniforms seem to be a different discussion than travel and training. Ms. Goodrich stated that the Council can discuss moving that item to another area.
 
Vice Mayor Barotz added in regards to employee pension, it may be helpful for the President of the Arizona Firefighter Association to come and present to Council the solution he is promoting. It is different than what the City’s solution may be and it could be helpful to see another perspective. Mayor Nabours stated that he would like to have a mini retreat on pension issues where the President of the Arizona Firefighters Association can present along with the League of Arizona Cities and Towns and the task force that Ms. Goodrich sits on.
 
Human Resources Director Shannon Anderson continued the presentation.

  • EMPLOYEE COMPENSATION - MARKET BASED PAY
Councilmember Overton clarified that the City would need $6.4 million ongoing. Ms. Anderson stated yes but the City would also have to plan for increases in merit going forward.
 
Councilmember Putzova stated that she would like to see the Council plan for the close the gap scenario. She added that it may take several years and she would like to see the City achieve market level of pay in five years.

  • EMPLOYEE COMPENSATION – MERIT INCREASE
  • EMPLOYEE INVESTMENT – NO COST OR LOW COST
Councilmember Putzova asked for additional information on how many employees, on average, the City has on FMLA each year over the last 5-10 years.
 
Human Resources Analyst Denise Thompson continued the presentation.

  • CUSTOMER SERVICE TEAM – PROGRESS UPDATE
  • CUSTOMER SERVICE TEAM – CULTURE & COMMUNICATION
  • CUSTOMER SERVICE TEAM – TRAINING
  • CUSTOMER SERVICE TEAM – MEASUREMENT & OUTCOMES
  • CUSTOMER SERVICE TEAM – REWARDS & RECOGNITION
Councilmember Brewster stated that she thinks the programs and ideas are great and asked where employees can find the on the spot awards to give out. Ms. Thompson stated that they are with the Administrative staff of each department and information will be going out to all employees soon to roll out the program.
 
A break was held from 2:34 p.m. through 2:47 p.m.
 
           
G. Advance Wrap Up
 
  Mr. Meilbeck explained that this is now the time for Council to discuss priorities in employee investment. He added that it will be a tough discussion given that there is not enough money to do everything.
 
Councilmember Oravits stated that he would like to address the retention issues in the Police Department. There are limited resources and when spread out over the entire organization it gives a smaller share to everyone.
 
Mayor Nabours stated that at a minimum, the stop the bleeding columns should be considered and a plan needs to be put into place for the close the gap column.
 
Councilmember Overton stated that he is happy to see the more creative option but would be happy just seeing that the City does not go backwards. He stated that the City will be lucky to hold flat and that his direction would be to hold flat and identify ongoing monies.
 
Councilmember Putzova stated that there are options but the Council has to be willing to address the revenue part of the budget. She asked for options related to compensation; specifically what it would look like if the City committed to coming to market pay in five years and what the revenue side of the budget would have to look like.
 
Mr. Meilbeck asked if there is anything in particular that the Council would like to see in terms of creativity.
 
Councilmember Oravits stated that the Christmas holiday was a great example as well as some of the professional development that has been done. He would like to stay away from an ongoing financial commitment to salary unless there is a change in revenue tools or direction.
 
Councilmember Putzova stated that one of the things she would like to look at is parental leave. She feels that it could be an interesting tool to use to address retention and attraction. She would like to look at what it would be to offer a three or six month parental level. She requested information on the financial implication to the options. Councilmember Overton asked that staff also look at the service implications to the organization and to co-workers.
 
Councilmember Brewster stated that the further the Council delays the further the City gets behind but the problem lies in where the money come from. She stated that she would like to have a lot of different options on how to increase revenue but stated that increasing revenue for employee pay will affect the community as a whole, including the employees.
 
Councilmember Overton stated that the requirement for addressing employee pay would require the City to come up with $5 million; that is significant and could mean closing a division or merging divisions. He would like to leave that option on the table and asked if the City should fundamentally change the way it does business to address employee compensation. Vice Mayor Barotz added that by reexamining closing a division or merging a division would certainly include layoffs and that is a tough tradeoff.
 
Councilmember Evans stated that if employee compensation is going to be a Council goal then Council should actually try and address it. There are revenue options on the table that the Council has refused to look at. She stated that she would like to see the Council do something towards this goal by looking at revenue options and a higher cost recovery for services. She feels that it is not appropriate to look at only one division within the organization to address employee investment.
 
Councilmember Oravits stated that he focused on the Police Department because the retention rate that they are experiencing is not happening city wide. There is so little funding to work with so start working where the biggest issues lie. Councilmember Evans stated that some of the revenue options are not going to address the issue in its entirety but revenue tools are not being utilized to address the issues even on a small scale. By singling out one department they are given the most value and it discounts the work that others in the organization do. This perception will be there whether it is intended it or not.
 
Councilmember Overton stated that community capacity is at its limit. The community will not be interested in paying more.
 
Councilmember Putzova stated that there may be things that the City can do that would generate revenue. There has been an increase in municipalities offering broadband services. That is an example of a service that could be part of the portfolio of services that the City provides. These ideas cannot be accomplished in a year or two and there may need to be initial investment to generate funds. The City should be looking at improving and increasing or adding new services that will generate revenue. Otherwise these discussions will happen year after year.
 
Councilmember Evans stated that there was a Save A Million group that was formed who looked for the pennies. The group was able to come up with one time dollars to address some things but the struggle is finding ongoing dollars to address ongoing things. She suggested that maybe it is time to pool employees and EAC to find ongoing money.
 
Mr. Meilbeck asked if there is any desire to look at program reductions.
 
Vice Mayor Barotz stated that she is not supportive of getting rid of a program.
 
Mayor Nabours asked if most of the work in Community Development can be outsourced or if Economic Vitality can be done in other ways. He asked if there are cities that do not have these functions or departments and how they manage. He stated that he would be willing to look at anything.
 
Vice Mayor Barotz stated that one of the things that she does not want to do is eliminate jobs for the sake of others getting a pay increase. She stated that she feels that the EAC does not fully understand the tradeoffs of what it will take to get employees to market.
 
Mayor Nabours stated that his goal is to make the City as efficient as possible and if there are ways that a department can be merged with another to be more efficient then he would like to explore that.
 
Councilmember Evans stated that the City is efficient; a number of employees were laid off in 2008 and staffing has not been restored, employees are doing the work of multiple employees. She stated that a realistic conversation is needed with EAC.

Councilmember Overton stated that he does not want to send the message that the City is in panic mode but employees need to be aware that it is status quo flat unless things are addressed. The Council and employees need to be honest about the resources available.
 
Councilmember Putzova would like to see staff proposals for the budget and their proposed solutions to the goals that Council has set. She does not want to leave today with a statement that flat is where the City is going to stay. A good plan can be developed for the next few years to achieve the goals.

Mr. Meilbeck stated that staff’s obligation is to bring the Council a budget and have it adopted. The challenge is to bring the Council a budget that achieves goals without decreasing service or raising taxes. It is a difficult task.
 
4. Adjournment
 
  The City Council Mini Budget Advance of January 22, 2015, adjourned at 3:50 p.m.







 
 
  _______________________________
MAYOR
ATTEST:



 
 
_________________________________
CITY CLERK
 


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get_Minutes (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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SortedList (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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getMinutes (Datasource=frsRO, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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attachments (Datasource=, Time=0ms, Records=0) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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get_Minutes (Datasource=, Time=0ms, Records=0) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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attachments (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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get_Minutes (Datasource=, Time=0ms, Records=0) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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SortedList (Datasource=, Time=0ms, Records=0) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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attachments (Datasource=, Time=0ms, Records=0) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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get_Minutes (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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SortedList (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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getMinutes (Datasource=frsRO, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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attachments (Datasource=, Time=0ms, Records=0) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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get_Minutes (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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SortedList (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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getMinutes (Datasource=frsRO, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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get_Minutes (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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getMinutes (Datasource=frsRO, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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attachments (Datasource=, Time=0ms, Records=0) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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get_Minutes (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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SortedList (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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getMinutes (Datasource=frsRO, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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attachments (Datasource=, Time=0ms, Records=0) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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get_Minutes (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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SortedList (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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getMinutes (Datasource=frsRO, Time=16ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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attachments (Datasource=, Time=0ms, Records=0) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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get_Minutes (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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SortedList (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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getMinutes (Datasource=frsRO, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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attachments (Datasource=, Time=0ms, Records=0) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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get_Minutes (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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SortedList (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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getMinutes (Datasource=frsRO, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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attachments (Datasource=, Time=0ms, Records=0) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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get_Minutes (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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SortedList (Datasource=, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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getMinutes (Datasource=frsRO, Time=0ms, Records=1) in D:\inetpub\PublicPages\public\publish\print_minutes_dsp.cfm @ 21:40:46.046
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