Council Budget and Finance

Summary

Meeting Overview

The Budget & Finance Committee met on October 22, 2013, at 1:00 p.m., with Charles Etlinger presiding. The committee addressed five agenda items, including approval of the previous meeting's summary, a monthly financial report, a fund balance discussion, a risk management review, and items referred to the committee. The meeting resulted in three motions and votes, with two items approved and one deferred. The committee heard ten public comments during the meeting. Overall, the committee approved the August 27, 2013 committee summary and the fund balance discussion, received informational presentations on the monthly financial report and risk management review related to general government links, and deferred action on items referred to the committee for further consideration.

Attendance

The following individuals were present at the meeting on October 22, 2013:

• Charles Etlinger
• Linda Gorton
• Kevin Stinnett
• Steve Kay
• Chris Ford
• Julian Beard
• Bill Farmer
• Jennifer Scutchfield
• Jennifer Mossotti
• Peggy Henson

No members were absent or late.

Votes and Decisions

Approval of the August 27, 2013 Committee Summary 0:00

A motion to approve the August 27, 2013 Committee Summary was made by Bill Farmer and seconded by Jennifer Scutchfield. The motion passed unanimously with no abstentions.

Motion to Allocate Fund Balance 3:00

A motion to allocate fund balance for economic contingency, litigation reserve, health insurance, pension contribution, and 27th payroll was made by Bill Farmer and seconded by Linda Gorton. The motion passed unanimously with no abstentions.

Friendly Amendment to Fund Balance Allocations 3:00

A friendly amendment was proposed by Kevin Stinnett to add assignments of non-recurring uses of $12,500,000 and unassigned fund balance of $2,467,300. The amendment passed unanimously with no abstentions.

Budget and Financial Actions

The meeting included an appropriation of $12,500,000 for multiple financial purposes. This allocation was designated for:

• Economic contingency funds
• Litigation reserve
• Health insurance costs
• Pension contribution
• 27th payroll

No additional details regarding specific vendors, recipients, or resolution identifiers were provided in the meeting materials.

Public Comment

The meeting included comments from ten speakers addressing fiscal management and fund balance allocation.

Council Member Lane [00:03:36] expressed concern that the General Fund has been structurally out of balance for four years due to borrowing, particularly for pension funding, and questioned how a surplus was achieved despite this situation.

Jennifer Scutchfield [00:04:45] raised concerns that increasing taxes and franchise fees while maintaining large fund balances sends a poor message about budgeting and fiscal responsibility.

Steve Kay [00:05:17] challenged the idea of a surplus, emphasizing unmet needs from prior years and advocating for immediate investment in aging infrastructure like the fleet. He later [00:09:39] proposed a system where each Council Member allocates $100,000 increments across a ranked list to achieve equitable distribution.

Kevin Stinnett [00:06:25] suggested raising the fund balance to $4 million and proposed a system to rank and address district-specific infrastructure needs.

Diane Lawless [00:07:30] emphasized that the surplus resulted from prudent budgeting and spending, and supported investing in infrastructure projects.

Jennifer Mossotti [00:08:00] stated it would be a disservice not to consider projects in her district and defended her interest in funding local improvements.

Charles Etlinger [00:08:31] noted that over $50 million in requests were submitted by Council and Administration, and stressed the need for a structured ranking system.

Linda Gorton [00:09:02] suggested that requests be rank-ordered to streamline discussion, noting that merging both lists would lead to an excessively long meeting.

Harry Clarke [00:10:12] expressed concern that a complete division between Council and Administration in the ranking process could lead to inefficiencies.

The comments reflected broader tensions between fiscal conservatism and infrastructure investment priorities, with speakers divided on how to allocate available funds and whether a true surplus existed.

Contested Items

Fund Balance Allocation and Surplus Perception

Council members disagreed about the nature of the fund balance surplus and how it should be used. Some members argued that the surplus represented true excess funds that should be immediately invested in infrastructure projects. Others took a more cautious approach, contending that the apparent surplus actually reflected underfunded needs from prior years rather than genuine excess revenue. This group expressed concern about committing funds without first reviewing audited financial reports. The disagreement resulted in a split vote among council members, indicating the council was divided on whether to proceed with spending the fund balance or to wait for additional financial documentation.

Process for Ranking Fund Balance Requests

A heated discussion emerged regarding the procedural approach to prioritizing fund balance allocation requests. The central dispute concerned whether to combine Council and Administration requests into a single ranked list or to keep them separate. Proponents of merging the lists argued for a unified ranking system, while opponents raised practical and fairness concerns. Specifically, critics worried that consolidating all requests into one list would extend the meeting length considerably and create potential inequities in how requests from different sources would be evaluated and distributed. The debate reflected broader concerns about meeting efficiency and equitable treatment of competing funding priorities.

Approval of August 27, 2013 Committee Summary

0:00

The committee voted to approve the summary from the August 27, 2013 meeting. Bill Farmer moved for approval, and Jennifer Scutchfield seconded the motion. The summary was approved without dissent.

Monthly Financial Report

William O'Mara presented the financial results for the first two months of fiscal year 2013. 1:00

Financial Performance

Year-to-date revenues declined by $1.08 million compared to the prior year period. This decrease was primarily attributable to lower franchise fees and reduced employee withholdings.

Expenses for the same period were down $1.45 million, reflecting decreases in both personnel costs and operating expenses.

Despite the revenue decline, the net position improved by $402,000 due to the larger reduction in expenses relative to the revenue decrease.

Speakers

The presentation was delivered by William O'Mara, with Melissa Lueker also identified as a key speaker during this agenda item.

Outcome

This item was presented for informational purposes.

Fund Balance Discussion

William O'Mara presented the preliminary fund balance for fiscal year 2013, reporting a $10.4 million surplus resulting from higher revenue collections and lower-than-budgeted spending. 3:00

The committee reviewed and approved allocations of the surplus across several designated reserves:

• Economic contingency fund
• Litigation reserve
• Health insurance reserve
• Pension obligations
• 27th payroll funding

Following these allocations, the committee determined that a remaining unassigned balance of $2.47 million would be retained.

The discussion included participation from committee members Bill Farmer, Linda Gorton, Kevin Stinnett, Diane Lawless, Jennifer Mossotti, Charles Etlinger, Steve Kay, and Harry Clarke.

The fund balance discussion concluded with committee approval of the proposed allocations and the handling of the remaining unassigned balance.

Risk Management Review — General Government Links

Patrick Johnson presented an overview of the Division of Risk Management's services, operations, and financial performance 10:12.

Presentation Content

The presentation covered the division's insurance costs, claims trends, and risk mitigation efforts. Johnson highlighted that claims remained stable across most categories during the review period. He noted exceptions to this stability, including a major fire truck accident and wage and hour claims, which created notable impacts on the claims profile.

Key Findings

The review demonstrated that the division's risk management approach was generally effective, with most insurance categories showing consistent performance. The identification of specific incidents—particularly the fire truck accident—indicated areas where significant claims had occurred despite overall stability in other areas.

Outcome

This agenda item was presented for informational purposes, providing the governing body with an update on the Division of Risk Management's activities and financial status.

Items Referred to Committee

9:02

The committee discussed the process for handling future fund balance requests. Key speakers included Charles Etlinger, Linda Gorton, Steve Kay, and Harry Clarke.

The discussion focused on recommendations to rank and prioritize projects from both Council and Administration in order to streamline decision-making on fund balance allocation. The committee examined procedures that would improve how future requests are evaluated and processed.

The item was deferred, with no final action taken at this meeting.