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Work
Session Minutes of the Town of Present:
Mayor Ernie McAlister, Council Members Marla Dorrel, Michael Joyce,
Jennifer Robinson, and Julie Robison. Mayor Pro Tem Jack Smith and Council
Member Nels Roseland arrived late, and their arrival times are noted in
the minutes. Mayor
McAlister called the work session to order at Mr.
Roseland arrived at The
work session materials are attached to and incorporated in these minutes
as Exhibit A. Mr.
Joyce provided a summary of the citizen budget review committee report (Exhibit
A, pp. 1-15).
He stated that the committee’s purpose was to find a way to offset any
new debt issues in the general fund. He and Mr. Roseland discussed whether
council would be willing to take funds currently reserved for open space
acquisitions and put them back into the utility fund. This would involve
pulling $5.1 million from the 6 month reserve and putting it back into
open space. Mr. Joyce recommended reverting $5.1 million back to the
utility fund to offset debt. Mayor
Pro Tem Smith arrived Mr.
Joyce stated that he personally thinks the Parks, Recreation and Cultural
Resources Department should put a hold on all funding for the next few
years until more cash is available. He urged council to focus on the 2008
county property valuation. He said that in three years the Town will be
worth more, allowing Mr.
Joyce said that the Town already has reimbursement resolution authority
and asked staff to provide details on the utilization of that authority.
Finance Director Karen Mills stated that council makes decisions about
projects and their funding source based on plans and values. Once a
project is authorized the department moves forward and begins to spend
money. She said that if a project is debt funded then staff does not move
forward with a debt sale at that time—they wait until cash is needed.
Ms. Mills said that staff postpones bringing on debt service as long as
possible. Council has delegated authority to staff to take care of a
technicality in the IRS regulations which states that the Town has to
declare intent and reimburse itself within 60 days of funding. Staff takes
care of the technicality, signs the reimbursement resolution stating the
Town’s intent to reimburse itself with debt, settles the debt when
needed, and the debt comes into the budget based on the debt sale. Ms.
Mills stated that council can make changes in project funding until that
particular project starts to spend money. The Town uses reimbursement
resolutions all of the time in order to start projects and the debt can be
sold later. Staff maintains the records in-house and there is nothing to
be filed. Mayor
McAlister asked about the accounting for reimbursement resolutions. Ms.
Mills responded that if council appropriates $1 million from utility rates
for open space funding, the utility fund transfers money to that capital
project; that capital project is then authorized to spend the money on
open space at that time. She said that cash is not allocated until open
space is identified. Mayor
McAlister is concerned that the proposal would dismantle a series of
decisions and approvals already made for specific projects and the funding
sources allocated to them. He stated it would be like pulling the plug on
a project in mid-stream and not moving forward. Mr. Joyce disagreed,
stating that staff can identify an amount of allocated money to be used to
postpone debt service. He stated that cash exists from past allocations
for the 10-year capital improvement budget which is not going to be spent
this year because of ongoing funding. He questioned why the Town has cash
in the bank if it’s not going to be used. He said unused allocated cash
should be freed up for this fiscal year and that a reimbursement
resolution can be used for the next fiscal year to borrow money and refund
past allocations. Mayor McAlister stated that council agreed to fund
projects with debt. Mr.
Roseland said that it is difficult enough for council to discuss
appropriate funding sources for next year’s budget and he does not want
to revisit financing for past decisions and does not want to jeopardize
previous commitments. He said if the Town does have cash it can be used to
pay off debt early in order to lower debt levels. Mr.
Coleman stated The 10 year capital improvement budget allows the Town to
identify capital needs, infrastructure issues, and to plan ahead for them;
however, it forces the Town to accumulate financial resources to pay for
them. He said there is no question that staff can research projects in
past budgets where funding has not been spent, do an analysis on the
status of all of those projects, and give council a schedule of projects
that can be stopped. He stated the $5 million for aquatics is an
example of money just sitting there. He said they can also look into the
$8 million in new debt in the FY06 budget for roads. Mr. Coleman asked
council if they wanted to look at using this cash to pay down the debt.
Council concurred with this exercise; however they do not want it to hold
up the budget approval process. Mrs.
Robinson said that some of the money for projects is tied up in such a way
that they cannot be stopped, such as Preston Village Subdivision where the
front yards are torn up for sidewalk installation. Mr.
Joyce stated it is more of a philosophy change to use cash that’s
allocated but won’t be spent in FY06. Mr.
McAlister stated that the citizen budget committee suggestions are worthy
to pursue, but it is not possible to fold any of the suggestions into this
year’s budget due to the timing of when council received the report. Ms.
Dorrel stated that cutting the budget is a matter of values and priorities
which council needs to discuss. She said it does not mean that there is an
agreement that everything the committee identified the council would
automatically cut. Mayor
McAlister stated that council agrees that staff should come back with a
further evaluation of capital projects and how to handle cash differently
so as not to issue debt. Mr.
Roseland stated that the Town is getting $17 million back from the
Department of Transportation and council will have to make a decision on
how to use that money. Mr. Coleman stated that the Town must use that
money for roads or to pay off debt Open
Space Funding and Storm Water Assistance Ms.
Dorrel stated that the homeowner assistance stormwater program is new this
year. She asked at the capital budget work session to reduce that program
funding from $500,000 to $300,000, which council did before looking at the
operations budget. She said that the $1.5 million reversion to the
fund balance gives more leeway and asked council if they wanted to
increase the funding back to $500,000. Mayor McAlister supports increasing
the funding. Mayor Pro Tem Smith said that a good argument was presented
to reduce funding to $300,000; his only concern is that council doesn’t
habitually increase one area when another is decreased. Mr.
Joyce asked about the different line items in the budgets. Mr. Coleman
stated that there are two: one for drainage projects on public property
and another for similar projects on private property, which was reduced.
He said that $500,000 still exists for public projects and that Ms. Dorrel’s
suggestion is for private projects. Mrs.
Robison asked how ready the Town is to implement a $500,000 program. Mr.
Coleman responded that several requests have already been submitted and
those that are funded will require engineering work and a significant
planning process. Mr. Bailey added that seven projects are currently being
analyzed and that the sum of the projects greatly exceeds the $500,000
level. He
said that three to four citizens have expressed interest but they
haven’t put anything in writing. Staff’s intends to bring information
for the projects to council at the September 5th operations
committee meeting. Mrs.
Robinson would prefer to budget money upfront and stay within the
$500,000. She said that budgeting the $500,000 confirms that this is a
high priority for council. ACTION:
Mrs. Robinson moved to approve $500,000 for the homeowner stormwater
assistance program. Mr. Roseland provided the second. Ms.
Dorrel expressed concerned that there may be an expectation for a fixed
amount every year. She said that the demand should be reduced over time
because new situations are not being created. ACTION:
Vote was called for on the motion to approve, and Council granted
unanimous approval. Open
Space Funding Mr.
Roseland stated that FY06 open space funding is $1 million. He said that
there are significant stormwater problems throughout the Town and the open
space plan identifies stormwater regional improvement areas. He said that
the amount of funding provided to support stormwater improvements is a
drop in the bucket compared to the severity of problems throughout the
Town. He suggested using $1 million from the general government capital
budget to move forward on land acquisition for regional stormwater
improvement efforts and asked if it is something council should consider
in the upcoming budget. Mr.
Joyce stated that open space is perceived as untouchable land instead of
land that can be converted for some other use. Mr. Roseland stated that
there are three strategies for open space: (1) acquire land for passive
open space, which is the current program; (2) parkland acquisition, where
land is developed with the future intent of creating a park; and (3)
regional stormwater improvement efforts for land acquisition. Mr.
Roseland stated that there was an original recommendation of $2
million—$1 million for passive open space land acquisition and $1
million for future park development—but through budget process
deliberations it was whittled down to $1 million. He suggested council
consider $1 million for regional stormwater improvements instead of
park development. Mayor McAlister stated that he recalls the $2 million
was for open space and that park land acquisitions was a later discussion.
Ms.
Dorrel stated that the line item was for open space and park land. Mr.
Coleman concurred. She said whether $1 million or $2 million they are
combined into one line item and can be used in either way or in
combinations. Ms. Dorrel said Mr. Roseland is concerned that they don’t
differentiate between open space and park land for development. She
suggested council break those into separate line items for tracking
purposes, in which case funding levels for each component will need to be
determined. Ms. Dorrel stated that the open space plan defines open space
to include parks, greenways, golf courses, etc. Mayor
McAlister said that is an accounting procedure and asked about the
difficulty of splitting the categories. Parks, Recreation and Cultural
Resources Director Mary Henderson responded that the stormwater issue may
be okay, but others may get muddled. She referred to the “What is Open
Space?” document provided to council (Exhibit
A, pp. 32-35).
She said that when the Town buys park land they are trying to buy it in
conjunction with land identified in the open space plan, however, the
lines can get blurry. Mayor McAlister said the divisions of open space are
not a necessary part of the budget deliberations. He stated that the
funding level is $1 million and council needs to determine how it is
funded. Mayor McAlister suggested staff spend time breaking up the
designations and bring information back to council in the future. Mrs.
Robison stated that the $1 million is from the utility dedicated revenue
stream and is part of the budget. She asked where the money would come
from for an increase. Mr. Roseland about the overage for the Town with the
six month target level in the general fund cash balance. Mr. Coleman
replied that the Town is about $4 million over. Mr. Roseland recommended
the overage as a funding source. Mayor
Pro Tem Smith stated that he never looked to the bond referendum as
doubling the Town’s obligations. Mrs. Robison said that she thought
this decision had already been made. Mayor McAlister responded that
council did make the decision to leave funds in the utility fund this year
and use debt funding in the future when appropriate. Mrs.
Robinson is supportive of the $2 million because the Town should acquire
open space sooner rather than later; however, she does not want to add $1
million at the last minute. She said that sacrifices have been made by
all, especially with the pay plan. Mrs.
Robison recalls that council asked staff to provide more information on
spending and the bond issue for financing open space after the budget
process is completed. ACTION: Mr. Roseland moved to increase the line item from $1 million to $2 million. A second was not provided and the motion failed for lack of a second. Business
Licenses Mr.
Coleman stated that staff looked at how to deal with differences in
business licenses having no gross receipts. The Town needs a way to levy
the fee from an equity standpoint. Staff looked at different schedules
from different communities (Exhibit
A, pp. 21-22).
Staff recommends using the Mayor
McAlister asked if the chamber expressed a concern about the fees. Mr.
Coleman stated that the chamber board did not take a position on the
subject. ACTION:
Ms. Dorrel moved to accept the staff recommendation to adopt the Nonprofit
Funding Levels Mr.
Coleman stated that early budget discussions considered reducing funding
amounts for nonprofits. He said that some of the nonprofits are directly
related to programs undertaken by the Town—for example, Emergency
Medical Services is directly related to the fire department mission, The
Carying Place is related to the Town’s Community Development Block
Program, etc.—and the question was raised whether funding decisions
should be considered by departments where nonprofits are assisting the
Town in pursuing a mission within a particular department’s function. Mrs.
Robison said that she brought this up, stating that council should
evaluate the possible consequences of making a one-third cut in funding
requests for this year (Exhibit A,
p. 24).
As an example, she pointed to The Carying Place which is implementing
improvements to an Mrs.
Robison proposed keeping the funding levels the same as last year and
having staff evaluate each organization, which would take the process out
of council hands. Mayor
McAlister asked if The Carying Place gets funded from the CDBG program
funds and, if so, how much. Mayor
McAlister agreed that council could do a better job in ensuring that
nonprofits are aligned with the Town’s overall goals and objectives;
however, he is concerned with turning the responsibility for funding over
to staff because each council member clearly has a nonprofit of interest.
He doesn’t want to set council members against staff. Mayor
Pro Tem Smith is willing to stay with the weaning program so long as the
funds are taken from somewhere else. He does not want to add new things
and asked why the Town is adding cultural arts but dropping other funding.
Mrs. Robison said that if it is going to be done then the standard should
be applied evenly. Ms.
Dorrel said that the Town does not have a standard for nonprofits. She
said that Council has not given direction to the Parks, Recreation and
Cultural Resources Advisory Board nor to the Cultural Arts Committee
regarding cultural arts funding, and they are the ones who bring forward
recommendations for funding. She said that council should share their
expectations with those groups. She supports cutting back some but is
reluctant to have discussions because everyone has their favorites. Mr.
Coleman said that deciding on nonprofit funding is arbitrary and has
continually been a problem. Historically the cultural arts groups were in
the council’s budget but council decided to have those decisions
reviewed and recommended by the cultural arts committee. He said that all
of the groups are seen as lower cost ways to enhance the parks, recreation
and cultural resources mission by expanding offerings in the community. He
said that it goes well with the philosophy to have other nonprofits tied
to particular departments since there are department ties for most of the
nonprofits; however there are some that may not have ties for which
funding could be council’s decision. He said it is a good way to
evaluate the mission, determine how the nonprofit’s mission ties in with
functions provided by Town, and allows council to see more clearly when
making funding decisions. He stated that staff can provide an analysis to
help eliminate some of the arbitrary nature of the funding decisions. Mr.
Roseland stated that there are three flavors of nonprofit: (1) legislative
boards and commissions, (2) cultural art organizations, and (3) the Mrs.
Robison suggested that the manager evaluate departments and where the
nonprofits should go. She suggested not cutting funding this year but
commit to reform the process to ensure consistent handling. ACTION:
Mrs. Robison moved to fund the existing organizations as estimated for
FY05, keeping the funding level the same. Mr. Roseland provided the
second. Mr.
Roseland said that the state auditor requires accountability. He said if
staying with the prior year’s funding then the nonprofits should provide
an accountability report to the Town. He said that there is a standard
format that can be used so there is no need to reinvent the wheel. Mr. Coleman
stated that staff already receives that information and he will forward it
to the council. Mr.
Joyce asked how a new organization came in for funding. Ms. Dorrel stated
that the motion on the floor does not apply to cultural arts which is
where that new organization falls. Mrs.
Robinson reluctantly supports the motion. She wants these details ironed
out in advance of the budget next year. She said if there is no direct
link to the department, then cut the funding to zero. ACTION:
Vote was called for on the motion to restore the funding to the level of
$69,700. Mayor Pro Tem Smith and Mr. Joyce voted “no.” All others
voted “aye.” The motion carried by majority vote. Mayor
Pro Tem Smith disagreed because he feels the money should come from
somewhere else. Ms.
Dorrel stated that she will contact staff and council members to see if
the funding for nonprofits can be approached in the same way as the budget
committee. Work
Session adjourned at |