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HomeMy WebLinkAbout10/01/1990 Meeting e M I NUT E S Eugene City Council McNutt Room--City Hall October 1, 1990 4:30 p.m. COUNCILORS PRESENT: Robert Bennett, Ruth Bascom, Shawn Boles, Roger Rutan, Freeman Holmer, Roger Rutan, Debra Ehrman, Bobby Green (after 4:55 p.m.). COUNCILORS ABSENT: Emily Schue. The special meeting of October 1, 1990, of the Eugene City Council was called to order by His Honor Mayor Jeff Miller. I. WORK SESSION: LIBRARY AND DOWNTOWN REDESIGN BALLOT TIME LINES Mr. Gleason distributed copies of staff time lines for the library and downtown redesign ballot measures. He said that staff is requesting direction from the council on scheduling election dates for these two e measures. When considering the proposed election time lines, Mr. Rutan said that the council's ability to effectively educate the community on these issues is paramount. It is also important to allow staff enough time to complete supporting documentation on the issues. With this in mind, Mr. Rutan said that the downtown redesign project could be postponed from a March election without a serious impact. Ms. Ehrman said that from her experience with library presentations, it appears that a majority of the community would favor a library on the Sears site. She also noted that the library project time line is on schedule and suggested that the library measure be placed on the March ballot. Ms. Ehrman pointed out that because of the increasing likelihood that the library will be located downtown, a vote on library siting should precede a vote on downtown redesign. Mr. Boles agreed with Ms. Ehrman that the library siting measure should be placed on the March ballot and suggested that the downtown redesign be targeted for a May election. He noted, however, that doing so would mean a delay in the council's goal for having action on downtown redesign in 1991. Responding to a question from Mayor Miller, Mr. Gleason said that a March vote on library siting would entail only feasibility design concepts for a e MINUTES--Eugene City Council October 1, 1990 Page 1 e library on the Sears site. Because the voters will be presented with conceptual designs only, options for library financing will not be included. Mr. Holmer asked why the City would not be ready to seek a decision on library financing at a March election. Mr. Gleason explained that one potential financing option being considered for library funding is a General Obligation bond (GO). Because of the nature of this source of revenue, it would not be possible to put together a financing package which includes GO bond funding until there is greater certainty on what type of structure will be built. Mr. Holmer felt that the community would be capable of dealing with the library siting and downtown redesign issues at the same time. Responding to a question from Mr. Bennett, Mr. Boles said that the downtown redesign activities are not currently on schedule. He does not believe that the committee will have enough information in time for the December 12 council action deadline to make recommendations on this issue. Ms. Bascom said that while she shares the council's conviction that the Eugene community would support a library on the Sears site, she cautioned the council to remain attentive to public input in the library presentations. Ms. Ehrman moved, seconded by Ms. Bascom, to place a ballot measure on library siting before the voters at a March election and to tentatively target a vote on the downtown e redesign project for a May election. The motion passed 6:1; with councilors Ehrman, Bascom, Boles, Green, Rutan, and Bennett voting in favor; and Councilor Holmer voting opposed. II. WORK SESSION: FINANCIAL PLANNING Mr. Gleason reported that one of the council's goals for 1990 was to plan for the financial stability of the General Fund. In pursuit of this goal, the council requested a work session to discuss the financial status of the General Fund, review the most recent General Fund Six-Year Financial Forecast, discuss strategies being considered for balancing the FY92 Budget, and discuss strategies for bringing long-term stability to the General Fund. Mr. Gleason indicated that the council invited the lay members of the Budget Committee to attend this meeting and take part in the discussion. Those present included: Kappy Eaton, Don McLoud, Cheryle Hawkins, Joan Rich, Debra McMillen, Bobbie Green, and Jack Eberly. Mr. Gleason explained that a budget is a short-term, operational plan. Expenditures within the budget must always be balanced with revenues. He said that over the past ten years, the City has been operating 1.5 percent out of round within the budget. Since 1982, the City made several attempts to reduce the deficit; these have been moderately successful. e MINUTES--Eugene City Council October 1, 1990 Page 2 ~ .~ e Mr. Gleason pointed out several major problems associated with operating under a deficit. He explained that the City's budget has become inflexible which has impacted its ability to meet unforeseen needs. He said that capital expenditures have also been affected. In particular, the quality of the City's infrastructure has been declining progressively. Because of an inability to make minor repairs, infrastructure efficiency declines and operating costs increase. As a result, the City has lost money which could have been otherwise spent on asset maintenance. Mr. Gleason provided fire redeployment as an example of problems associated with operating under an inflexible budget. He said that the City had to reduce its standard for response time because it was unable to maintain operational standards within its budget. Mr. Gleason urged the council to rethink its budgeting process. He noted that there are little opportunities within the General Fund to make budgetary cuts without totally eliminating a service and warned that if the City continues the budgeting process as it has in the past, capital will continue to erode, the quality of services will decline, and beginning cash balances will be reduced. Warren Wong, Administrative Services Director, gave a slide presentation on this issue. He briefly reviewed the council and Budget Committee actions for the past ten years. He said that with the Development Services Financing Study the City is currently in the process of reviewing its user fees and charges. A policy guideline adopted in FY88 required the City to address its e projected deficits vis-a-vis the Six-Year Financial Forecast. Mr. Wong provided the council with a slide depicting what share the General Fund plays within the total City budget between FY80 and FY91. It is currently 50 percent. Mr. Wong provided a list of key changes in the General Fund over the past ten years. He also provided a list of revenues which are coming into the General Fund and pointed out that property taxes continue to be a major component of this fund. Ms. Bascom commented that the City has been unable to decrease the burden property tax must carry within the General Fund. Mr. Wong reviewed the most recent General Fund Six-Year Financial Forecast. He explained that the forecast is based on carrying the adopted service system forward and projecting no new revenue sources. He noted, however, that despite the projected deficit, the budget presented for adoption in the following year must be balanced. Mr. Wong said that the FY92 Six-Year Financial Forecast depicted a $3.4 million deficit, approximately 5 percent of the adopted FY91 budget. He noted that the forecast does not take into consideration the outcomes of Ballot Measures 4 and 5, nor other things such as wetlands or a new library. e MINUTES--Eugene City Council October 1, 1990 Page 3 e Mr. Wong reminded the council that Oregon State Statute requires that the adopted budget be balanced every year. The City took several actions to reconcile the projected deficit with the forecast, including: reducing its operational requirements, budgeting less for Contingency Funds and capital projects than planned, eliminating Tax Anticipation Notes (TAN) in the Debt Service, reducing transfers, and reducing the rate of growth of the end working capital. Mr. Holmer remarked that it is a tragedy that the City only budgets $1.4 million annually for capital maintenance. Responding to a comment from Mr. Rutan, Mr. Gleason said that the current forecasting formula has been successful for the City. He added that staff makes all budget decisions based on adopted council policies. Responding to a question from Ms. Bascom, Mr. Gleason indicated that in all systems for which the City relies on user fees to generate revenue, the City has been able to maintain high-quality services and reasonable rates. He provided 9-1-1 as an example of such a successful system. He advised that effective policy review is sufficient to monitor these systems. (At 6:05 p.m., the council recessed for 15 minutes.) Mr. Rutan suggested that the City undertake a strategic financial planning process. In order to facilitate this, he recommended the formation of a committee composed of City Council and Budget Committee members to look at e the possibility of implementing such a process. He explained that the process would involve gathering information from the community about its priorities for fiscal planning from which the City would make its budgetary decisions. Mr. Rutan also suggested that the City contract with an independent auditor to evaluate the City's long-term financial planning process. Mr. Boles echoed support for a strategic planning process but emphasized the importance of having a fast turnaround on the results. Referring to the Six-Year Financial Forecast, Mr. Boles said that the City does itself a disservice by not recognizing that the forecast is consistently off by $5 million. Ms. Eaton said she would support a strategic planning strategy if it would encourage the City to adjust and correct for past budgeting problems. She stressed the need to begin such a process qUickly. Responding to a request for clarification from Ms. Ehrman, Mr. Wong explained that the goal of a strategic planning process is to plan for the future of an organization based on consensus of those involved, often gauged through an extensive feedback/involvement process. He advised that if the council was interested in this, it gather information from other communities who have been involved with this type of process. e MINUTES--Eugene City Council October 1, 1990 Page 4 e Ms. Ehrman questioned the need for an independent auditor. She suggested that the Community Attitudes Survey would be sufficient to gain the additional information from the community that is required without further delegating the council's responsibility for financial decision making. Mr. Holmer expressed frustration with delaying budgeting decisions by initiating a strategic planning process. He said that the council needs to define its operating priorities and make budget decisions based on those priorities. Mr. Bennett expressed his support for a strategic planning process because it attempts to identify the community's desire for financial expenditures. He also offered his support for an independent audit of City functions to offer guidance on financial matters and, more importantly, to gain public confidence in the City's financial system. Ms. McMillen agreed with Mr. Bennett that involving community members in financial planning decisions is an effective way to improve public confidence in the financial system. Mr. McLoud emphasized that in order to achieve community consensus on financial matters, the public must first be educated about the City's financial problems. After that, the council can ask for feedback on the community's financial priorities. Mr. Eberly said that the community has demonstrated that the City needs to e reduce its spending and has indicated that the council needs to prioritize its funding strategies. Mr. Miller highlighted the difficulty of achieving community consensus on budget cutbacks. Mr. Boles noted that the results of the Community Attitudes Survey revealed that 73 percent of those surveyed were satisfied with how the City conducts its business. Mr. Eberly indicated that perhaps the community is satisfied because it does not understand that the City is overspending. Mr. Green offered his support for a strategic planning process and contracting with an independent auditor. Mr. Rutan pointed out that one positive result of a strategic planning process might be to make the council aware of innovative budgeting strategies which have achieved success within other communities. Ms. Hawkins said that a strategic planning process has merit because of its ability to formulate new strategies for deficit reduction. She emphasized that the City needs to identify new sources of revenue and said that it would be a mistake for the City to continue its present level of services at the expense of its capital. e MINUTES--Eugene City Council October 1, 1990 Page 5 e Mr. McLoud suggested that hiring an independent auditor might be valuable in order to confirm within the community the tragic nature of the City's declining capital assets. Ms. Rich said she does not support a strategic planning process because it only allows the City to delay its financial decisions. She also felt that there is no point in asking the community where financial cuts should be made. Mr. Holmer echoed Ms. Rich's concern for using the strategic planning process as a means to delay a final decision. He suggested that the council take a leadership position within the community and make a decision. Mr. Boles also expressed concern for delaying the final financial decision and said that he would be reluctant to support a strategic financial planning process if the council would not agree to follow the ultimate recommendation. Ms. Ehrman said she would support creating a task force to discuss the possibility of implementing a strategic planning process. She agreed with Mr. Boles that the council must make a commitment to follow the advice of the task force with respect to the ultimate financial planning process. Ms. McMillen offered her support of an independent audit. She felt that the ultimate financial planning process should involve all 16 Budget Committee members. e Members of the council and Budget Committee agreed on the need for a task force to consider possible means of financial planning. Mr. Rutan, Mr. Miller, Ms. Eaton, Ms. Rich, and Mr. McLoud volunteered to serve on that committee. The task force agreed to meet and report back with an outline of a financial planning strategy, including the possible consideration of a strategic planning process. At 7:20 p.m., the Eugene City Council adjourned its meeting. - (Recorded by Traci Northman) mncc 100190-430 e MINUTES--Eugene City Council October 1, 1990 Page 6