Budget & Finance Committee Meeting

Summary

Meeting Overview

The Budget and Finance Committee met on July 7, 2009, at 1:01 p.m., with Kevin Stinnett presiding. The committee addressed four agenda items during the session, hearing two informational presentations, approving one recommendation, and deferring one discussion item to a future meeting. The committee took two votes and heard four public comments during the meeting.

The agenda included an update on revenues for fiscal year 2009, an informational presentation on a Division of Engineering New Development Section Audit, consideration of a General List of Recommendations From Council Links which was approved, and a discussion on fund balance for the Urban Services District Fund which was deferred.

Attendance

Present: Kevin Stinnett, Ed Lane, dim Gray, Linda Gorton, Chuck Ellinger, Andrea James, Julian Beard, Tom Blues, Peggy Henson, and Mike Webb.

Absent: George Myers.

Late: None.

Votes and Decisions

The council took two votes during this meeting.

Council Link Recommendations Procedure 1:25:59

A motion was made by Ed Lane and seconded by Martin to adopt a procedure for council link recommendations to be reported back to the Budget & Finance Committee. The motion passed by voice vote with no abstentions.

Adjournment 1:37:20

A motion was made by Tom Blues and seconded by Julian Beard to adjourn the meeting. The motion passed by voice vote with no abstentions.

Public Comment

Four speakers addressed the council during the public comment period, raising concerns about fund management, financial transparency, and revenue reporting.

Urban Services Fund Balance and Capital Needs

Andrea James cautioned against interpreting the Urban Services Fund balance as available spending capacity 1:32:25. She emphasized the need for capital investment in waste management operations and equipment upgrades, noting that current service delivery levels do not eliminate the necessity for these expenditures.

Fund Transparency and Composition

Linda Gorton stressed the importance of understanding the composition of the Urban Services Fund to enable informed decision-making 1:31:19. She referenced past success in lowering taxes through fund-specific analysis, underscoring the value of detailed fund information.

Revenue Reporting

Kevin Stinnett requested the re-initiation of a detailed monthly revenue report that had been used previously 1:45:42. He indicated that restoring this reporting mechanism would improve transparency and tracking of revenue streams.

Insurance Payment Timing

Julian Beard sought clarification regarding the timing of insurance premium payments and their impact on revenue reporting 1:42:20. He asked whether late payments from insurers could affect June 2009 revenue figures, and confirmed that July payments for June expenses are accrued into the fiscal year.

Contested Items

The July 7, 2009 meeting included two significant areas of disagreement among council members.

Contingency Planning for Revenue Decline

Council members debated whether to adopt a contingency plan to address the possibility that revenues might remain flat or decline. Councilman Martin and other council members advocated for immediate planning measures to prepare for potential revenue shortfalls. The administration countered that deep budget cuts were difficult to justify at that time, given that revenues were still being received. This disagreement reflected differing views on the appropriate timing and urgency of fiscal contingency planning during uncertain economic conditions.

Urban Services Fund Spending

A heated discussion arose regarding the $33 million Urban Services Fund balance. Some council members expressed concern about spending from this fund without first conducting a thorough analysis of capital needs. They urged caution in deploying these resources. Other council members emphasized the importance of transparency and accountability in how the fund was being used, suggesting that the funds should be deployed with clear justification and public understanding of their purpose. This disagreement centered on balancing fiscal prudence with the need to utilize available resources responsibly.

Update on Revenues FY 2009 and Discussion

Bill O'Mara presented preliminary revenue data for fiscal year 2009 2:35. The presentation focused on the current state of revenues amid challenging economic conditions.

Revenue Performance

O'Mara reported a 0.3% year-over-year increase in withholdings and a 0.64% overall increase in primary revenue streams. Despite these modest gains, he noted several softening trends affecting revenue growth.

Economic Headwinds

The presentation highlighted significant economic pressures impacting revenues:

• Rising unemployment at 7.7%
• Declining insurance premiums tied to stagnant home values
• Reduced new car purchases affecting related revenue streams
• Broader recessionary conditions affecting overall revenue growth

Outcome

This agenda item was presented as informational, providing the meeting participants with an update on the fiscal year 2009 revenue situation and the economic factors influencing revenue performance.

Division of Engineering New Development Section Audit

Bruce Sahli presented findings from an internal audit of the New Development Section 46:45. The audit identified several significant deficiencies in the section's operations.

Key Findings

The audit revealed the following issues:

• Deficiencies in inspection documentation
• Lack of standardized procedures across the section
• No systematic problem tracking mechanism in place
• Insufficient supervision of staff and processes

Recommendations

To address these deficiencies, the audit recommended:

• Standardizing documentation practices throughout the section
• Reorganizing the reporting structure
• Implementing internal audits on a regular basis

Management Response

Mike Webb and other management representatives participated in the discussion and committed to taking corrective actions in response to the audit findings.

Outcome

This agenda item was presented for informational purposes, with management acknowledging the audit results and indicating their intention to implement the recommended improvements to the New Development Section's operations.

General List of Recommendations From Council Links

1:25:29

Chair Kevin Stinnett introduced a proposal regarding the handling of recommendations from council links. The discussion centered on establishing a procedure for council link chairs to report progress on their recommendations to the Budget & Finance Committee.

Stinnett proposed that council link chairs provide regular updates on the status of recommendations they had previously submitted. This would create a systematic mechanism for tracking and following up on past recommendations, ensuring they received ongoing attention and accountability.

The proposal was discussed by council members including Ed Lane and Martin. The discussion proceeded without significant objection or debate over the proposed procedure.

A motion to adopt this procedure was brought forward and passed without dissent, indicating unanimous support from the council. This approval established that council link chairs would henceforth report their progress on recommendations to the Budget & Finance Committee on an ongoing basis.

The outcome enables the council to maintain continuity in addressing recommendations that have been made by various council links, preventing recommendations from being overlooked or abandoned after initial submission.

Discussion on Fund Balance for Urban Services District Fund

1:27:33

Council members discussed concerns regarding transparency and allocation of the $33 million Urban Services District Fund balance. The discussion centered on how funds are distributed across three service areas: solid waste, street cleaning, and street lighting.

Key Concerns Raised

Council members expressed concerns about the lack of detailed reporting on fund allocation. There was particular emphasis on understanding how the $33 million balance is divided among the three service categories and whether the current allocation reflects actual service needs and costs.

Council members urged caution against spending the fund surplus without first conducting a thorough analysis of long-term capital needs. They emphasized the importance of knowing what infrastructure investments and maintenance requirements exist before committing funds to new expenditures.

Speakers

The discussion involved Bill O'Mara, Linda Gorton, Andrea James, and Kevin Stinnett.

Outcome

The agenda item was deferred, indicating that the discussion was postponed rather than concluded. This deferral suggests that additional information, analysis, or further deliberation will be needed before the council can make decisions regarding the Urban Services District Fund balance.