Budget and Finance and Economic Development Committee

Summary

Meeting Overview

The Budget, Finance & Economic Development Committee met on October 27, 2015, at 1:00 p.m., with Stinnett presiding. The committee addressed six agenda items, including approval of the previous meeting's summary, review of financial reports, and consideration of fund balance matters. During the meeting, the committee took 11 votes and heard 5 public comments.

The committee approved the September 22, 2015 Committee Summary and the FY 15 Fund Balance item. Two financial presentations were provided on an informational basis: the September Financials General Fund and the Monthly Budget Report Other Funds. The Contingency Fund item was deferred to a later date. The committee also approved Items Referred for consideration.

Attendance

The following individuals were present at the meeting on October 27, 2015:

• Stinnett
• Moloney
• Kay
• Lamb
• Farmer
• Scutchfield
• Brown
• Mossotti
• Bledsoe
• Hensley

No absences or late arrivals were recorded.

Votes and Decisions

The meeting included eleven votes, all conducted by voice vote except where individual votes were recorded.

Motions Passed by Voice Vote:

• Motion to approve the August 25, 2015 Budget, Finance & Economic Development Committee Summary, moved by Farmer and seconded by Bledsoe 14:05

• Motion to bring a proposal forward for alternative options for the Economic Contingency Funds, moved by Kay and seconded by Mossotti 2:30

• Motion to remove Activity Based Costing/Financial Efficiency from Committee, moved by F. Brown and seconded by Mossotti 3:00

• Motion to accept all yellow boxes as reported and recommended by the administration for the FY15 fund balance, moved by Brown and seconded by Bledsoe 1:32:17

• Motion to report out the fund balance portion of the meeting today during work session, moved by Farmer and seconded by Bledsoe 1:42:01

• Motion to remove the solid waste user fee structure through the Waste Management Task Force, moved by Farmer and seconded by Bledsoe 1:43:37

• Motion to remove Quarterly Development Reports from Committee, moved by Farmer and seconded by Bledsoe 1:44:16

• Motion to remove World Trade Center from Committee, moved by Farmer and seconded by Bledsoe 1:46:34

• Motion to adjourn, moved by Bledsoe and seconded by Mossotti 3:00

Recorded Votes:

• Amendment to delete the $4.6 million recommendation to bring the Economic Contingency Fund to 10% of prior year's revenue, moved by Brown and seconded by Bledsoe: Failed 5-4 1:26:54
• Voted for: Farmer, Lamb, Scutchfield, Hensley, Bledsoe
• Voted against: Kay, Brown, Mossotti, Moloney

• Amendment to reduce the $4.6 million recommendation to $2.3 million, moved by Lamb and seconded by Farmer: Passed 5-4 1:32:47
• Voted for: Farmer, Lamb, Scutchfield, Hensley, Bledsoe
• Voted against: Kay, Brown, Mossotti, Moloney

Budget and Financial Actions

The meeting addressed several amendments to the Economic Contingency Fund and recommendations for establishing financial reserves.

Economic Contingency Fund Amendments

The body considered multiple adjustments to the Economic Contingency Fund:

• An additional contribution of $4,600,000 to reach 10% of prior year's revenue
• A reduced contribution of $2,300,000 to the Economic Contingency Fund
• An additional $1,052,000 to the Economic Contingency Fund based on 25% of the change in fund balance

Reserve Recommendations

Three reserves were recommended for establishment:

• A litigation reserve of $11,500,000
• An insurance reserve of $3,000,000
• A prior project assignment reserve of $13,500,000

These financial actions totaled $48,952,000 across all proposed amendments and reserves.

Public Comment

Several council members addressed fiscal policy and budget allocation priorities during the meeting.

Contingency Fund and Reserve Policy

Council Member Hensley spoke at 1:33:25 regarding contingency fund size and policy. Hensley supported limiting the contingency fund to 10% of the budget, noting that the state's contingency fund comprises only half a percent of total budget. Hensley argued that perpetual growth of the fund prevents access to funds when needed.

Council Member Farmer also addressed contingency fund policy at 1:33:25, advocating for a policy change to allow access through council approval with a replenishment plan, rather than the current calculation test requirement. Farmer argued that the existing system is too restrictive and prevents access during emergencies.

Infrastructure and Fund Allocation Priorities

Council Member Brown expressed concerns about paving needs and infrastructure funding at 1:36:11. Brown raised grave concerns about the city's infrastructure, particularly paving needs in the 8th District, and argued against increasing fund balance reserves. Brown advocated instead for allocating funds to paving, public safety, and parks.

Vice Mayor Kay spoke at 1:33:25 on fiscal responsibility and fund allocation. Kay agreed with Council Member Brown that saving money in a fund earning little return while infrastructure needs accelerate is not fiscally responsible. Kay supported a cap on the contingency fund.

Litigation Reserve

Council Member Bledsoe raised a question at 1:21:28 regarding the litigation reserve and risk analysis. Bledsoe asked whether the litigation reserve is based on a risk analysis. The response indicated that the reserve is based on current pending litigation matters, though full details require a closed session.

Contested Items

The October 27, 2015 meeting included two significant areas of disagreement among committee members.

Funding Allocation Between Contingency Fund and Infrastructure Needs

The committee was divided on how to allocate $4.6 million in available funds. One faction, including Council Member Brown, argued that the funds should be directed toward paving, public safety, and parks rather than added to the Economic Contingency Fund. The opposing view supported allocating the $4.6 million to the contingency fund to reach the target of 10% of the budget. This disagreement resulted in a split vote, indicating the committee could not reach consensus on the proper use of these funds.

Policy Change for Contingency Fund Access

A heated discussion emerged regarding how the contingency fund should be accessed in the future. The debate centered on whether to change the fund's access requirement from a calculation test to requiring council approval. Committee members held differing views on the fund's intended purpose and the degree of flexibility needed to respond to emergencies. Some members advocated for the calculation test method, while others supported moving to a council approval process, reflecting broader disagreement about balancing fiscal controls with operational responsiveness.

September 22, 2015 Committee Summary

14:05

The committee reviewed the summary from the previous meeting held on September 22, 2015. Stinnett presented the summary for the committee's consideration.

The committee approved the summary without requesting any changes or additions. No concerns or issues were raised during the review process.

Outcome: The September 22, 2015 Committee Summary was approved as presented.

September Financials General Fund

Commissioner O'Mara presented the September financials for the General Fund 15:41, highlighting strong economic indicators and revenue performance.

Presentation and Discussion

The presentation focused on the General Fund's financial status for September, with emphasis placed on positive economic trends and revenue collection results.

Questions and Concerns Raised

During the discussion, several commissioners raised questions about specific financial matters:

• Lien collections were a topic of inquiry among the board members
• Questions were raised regarding fund balance usage and how reserves were being allocated

Key Participants

The following commissioners and officials participated in the discussion:

• O'Mara
• Cooke
• Kay
• Brown
• Moloney
• Lamb

Outcome

This agenda item was presented for informational purposes. No formal action or decision was required on the September General Fund financials at this meeting.

Monthly Budget Report Other Funds

24:32

Melissa presented the monthly budget report for other funds to the committee. The presentation was received as informational, with no questions or concerns raised by committee members regarding the report contents or findings.

The committee accepted the report without further discussion or debate.

Contingency Fund

Tyler Scott presented findings on the Economic Contingency Fund to the committee 25:04. Scott's presentation included three primary recommendations: maintaining the fund's 10% goal, changing access requirements to require council approval, and establishing a replenishment plan.

The committee engaged in discussion regarding the fund's structure, accessibility, and policy implications. Key participants in the discussion included Farmer, Brown, Kay, Bledsoe, Hensley, and Moloney, alongside Scott.

The outcome of this agenda item was deferred, meaning the committee did not reach a final decision and postponed further action on the contingency fund recommendations to a future meeting.

FY 15 Fund Balance

1:04:11

Commissioner O'Mara presented a preliminary fund balance analysis for fiscal year 2015, which included recommendations for specific reserve allocations and unassigned fund balance amounts.

The committee discussed the rationale behind each of O'Mara's recommendations during the presentation. Participants in the discussion included Commissioners Brown, Bledsoe, Lamb, Hensley, and Kay, along with O'Mara.

The committee voted to approve the proposed allocations as presented.

Items Referred

3:00

The committee discussed and voted on removing several items from the committee's jurisdiction. The speakers involved in this discussion included Farmer, Bledsoe, Brown, and Kay.

The items under consideration for removal were:

• Activity Based Costing/Financial Efficiency
• Quarterly Development Reports
• The World Trade Center

The motion to remove these items from the committee's jurisdiction was approved. Following this action, the committee also passed a motion to adjourn.