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HomeMy WebLinkAbout2009-03-04 TranscriptionMarch 4, 2009 City Council Page 1 March 4, 2009 City Council Special Work Session -Priority Setting 6:05 P.M. Council Present: Bailey, Champion, Correia (arrived 6:25 P.M.), Hayek, Wilburn, Wright Council Absent: O'Donnell Staff: Lombardo, Helling, Karr, Dilkes, O'Malley, Lewis, Craig Others Present: Gunn - UISG Representative Priority Setting Process: Bailey/ All right. Michael, Kevin? Lombardo/ I guess, um, just to recap a little and...and kind of set the stage for why we're here and what we're going to undertake tonight hopefully. Um, the initial budget that was submitted to you all identified a sustained deficit situation and the need for permanent reductions. Bailey/ Can...I'm sorry, I didn't realize Mike Wright isn't here, so if...he just stepped out for a moment. Lombardo/ Oh, okay. Bailey/ That was my fault. (both talking) Thank you. Okay. All right, let's... Lombardo/ Um, so just to recap, um, you know, we've discussed over the course of the budget, uh, work sessions and...and even since then, uh, the current situation with our budget, the need for sustained budget reductions, and certainly with the addition of Fire Station #4 and the increase in operating costs, um, places further emphasis on the need to prioritize our current services, and make some decisions about how to shift resources or reduce expenditures, to be able to accommodate our budget for the foreseeable future. Um, I apologize. We're having technical difficulties, but you have a spreadsheet in front of you and, um, we were hoping to model, uh, as we discussed some of this, but the deficit picture, just to kind of go through it, um, with Fire Station #4 we show a deficit of $477,000 this year, growing to 767,000 next year, and then, uh, remember FY12, uh, 2012 is the year where we have that added pay period, so that the deficit increases to a projected $2.2 million and then sustained for around a million to a million and a half, uh, from FY13...uh, 2013, 14 and beyond and...and one of the things I want to emphasize there is, unless something dramatic changes in the overall revenue picture, then the deficit projections don't stop there. It's not as though that's going to self-correct, and...and I guess I want to use that as the point for consideration a little bit later, about trying to derive some understanding, acceptance about what it is we feel we need to cut, and what this process over the next couple of months is going to...to bring us to. Um, and so there are some things that I guess, or some questions and...and a dialog I'd like to engage with you all and...is...is in terms of the level of engagement. I provided you This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 2 some material, and really we don't have time in the course of three months to develop a strategic plan and then to develop, you know, a system of prioritization that is custom-fit to Iowa City. I mean, there's just not enough time to really do that, um, even if we were to bring in facilitators and really...it's just too much to accomplish, and so because there is such a need to get through this really in the next few months, I'm recommending that we...we look at models, and I gave you one kind of "for instance." That's more or less a guideline, and I want to get some input from you all in terms of your level of...of engagement and...and involvement, uh, in...in identifying the criteria and those categories that we think are important, and then the weighted amounts, and if you...I would prefer and would presume that you would all...would want to be part of that think piece and part of the development of that, and so that's a question. If I'm accurate in that, then we need to schedule a few sessions, uh, fairly soon to go through. We'll lead you through a process to...to help facilitate that dialog and come up with the end product, come up with the ranking of the criteria and then the weights, and then you know go through a validation process with you all to get to that. Uh, and that's best done through kind of a facilitated, we'll lead you through kind of an exercise to help flush all of that out. So...perhaps that could be the first point of discussion, are you all intended. on being engaged on the front end to help develop those parameters for us? Wright/ Absolutely! (several commenting) Hayek/ I don't know, um, I...obviously Council plays a critical role in establishing, uh, priorities, um, and policy direction but if that process means we...as Councilors sit around a table with a essentially blank piece of paper, um, I don't have concerns about that, and maybe I'm not understanding what the (both talking) Lombardo/ Yeah, the...what I would entail is, if you go to the memo that was included in the packet and just kind of the...the Fauquier County, Virginia model. We would...we would go through a process to...to develop the criteria and many of them maybe similar to what you see here. They maybe totally different. I don't know. That's...that'spait of the process that we would engage in...and help come to that consensus, and build the set of criteria that we are going to use then at the staff level to...to collect the data and information and... and come up with, and then also, the waiting.. . Hayek/ Yeah. Lombardo/ ...structure, and then we would go through the process internally at the staff level to fit our...our, uh, services and programs through this, or we would put it through this and then come up with kind of the results, and then we would meet again with you all to discuss it, validate the results, talk about what...what this is telling us to do or not do, and then come to some agreement about... Hayek/ Are you saying... Lombardo/ ...how to use it. This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 3 Hayek/ ...this example that you included from Virginia, I mean, are you saying it could be as simple as a one-page template, like this is? I mean, is that essentially... Lombardo/ Ideally, I mean, we can provide other, I mean, if we're going to go through this process we'll provide other examples, and we'll help provide information in terms of broader, you know, more selection of categories, so that...that you all have a better understanding of how we might come up with these criteria. Hayek/ Right. Lombardo/ So that you're not having to think'em up on your own, um, certainly you could! I mean, there's nothing to say that you can't, but we want to be sure that we make it as easy a process for you all to...to...to fully engage in and come up with that criteria. And...and if it's a matter of sitting around and trying to, you know, force you to create the model, that...that's a tremendous amount of work and...and you know really not necessary. There's other models out there that I think we can use and then through a group kind of process, we can help you ferret out the ones that we think are gernlane to us or not. Hayek/ I mean, that...that makes more sense, uh, I worry about our, uh, about the efficiency of delving into subject matter specific criteria, um, you know, more sort of...more objective, global set of criteria that is short, applies to everything from A to Z.. . Lombardo/ That's what we're looking for. Hayek/ ...that you then take and apply and come up with... Lombardo/ Exactly! And...and then that gives us, I mean, some measure of buy-in then. As the results come forward, you know, we have some general consistency with what...what we've set as...as a model to...to establish those priorities. Otherwise the other alternative is for us to develop this at the staff level, go through the process, and run the risk of coming back to you all at the end of the day, and saying okay here's what the model tells us and...and how we would, you know, step forward with potential reductions, and you all say well we don't agree with that prioritization or those criteria or...or the method for getting there. So I think it's important that Council engages in...and plays a role in developing those criteria, and the weighting, so that we know that they're consistent with the broad, more global vision that you are setting. Bailey/ Is there no department in the City that has any kind of ranking or rating, um, model at this time? Lombardo/ Not that I'm aware of, um, nothing that's been used globally, um... O'Malley/ I believe the Library does a strategic plan every ten years. This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 4 Bailey/ Yeah, well, the Library, I mean, many departments have strategic plans...but, I mean, I was just wondering if there was anything that we could also overlay, and if there's nothing internal... Lombardo/ Staff are in the process now, departments, um, and...and are really looking at identifying everything that they do. Um, every program, every service, anything that requires funding and trying to come up with a very thorough list of, because even embedded within certain services, there maybe aspects of it that we could agree globally that, um, are less important than the main thrust of what they do, and I...off the top of my head I don't have a good example, but um, you know, I want to make sure that we have as granular of data as possible so that we're not making sweeping cuts to one area, if we can effect...take pieces of it that we think mean...will be meaningful to reduce, and...and then you know give us the ability to...to maintain some level of service, if we find it to be important. So that...that's going to take a fair amount of work, and...and I think having that....amount of granularity, level of granularity, is going to be important as we really look at, uh, defining what we do and cutting, uh, some of those discrete areas. Wright/ Yeah, but I think there's also, in addition to granularity with this process, there's...weighted data that's supplied consistently. I think it's ultimately going to be a more fair process, and staff are probably going to be inclined to see it in a better light. Lombardo/ We're trying to make it objective. Bailey/ Um, I think that also one of the things we should talk about when we talk about whatever model we're developing, if we have a score and a weight, how we use the rankings, because this has come up at the JCCOG level with, um, ranking for road projects, and is the ranking a guide or is it...if it rises to the top with the number, it's it. So I also think we should talk a little bit about our expectations. Do others agree? I mean, I just want to get a sense... Hayek/ It could be a pitfall. Bailey/ Yeah. Hayek/ Either way. Bailey/ Yes. Hayek/ Right? Bailey/ Yes, but I think if we go in understanding everybody's...our collective expectations, of how we're going to use such a model that we develop...it will be...I'll just say -easier discussion -than if we all make assumptions about how we're using the tool. Wilburn/ Well, I, um, I think the over-arching concern I would have is just that balance of, uh, Council and staff involvement. If Councils not...I, uh, and this is nothing against any of This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 5 you. I'm including myself in this. Uh, if Council does not have some involvement up front, I...I can easily foresee something coming back to us and, uh, this is no good, and I don't want to waste staff s time, um, because that can be very frustrating. Um, on the other hand, uh, I'm in a...an interplay of bouncing back and forth. Council involved in certain parts, staff taking direction from (mumbled), bringing back something to us and then that makes sense to me, um, and uh, just the difficulties with some of the other things that we have going on and...and uh, you know, I just, I just don't want to see us get to that point where...the whole thing essentially is thrown out, and then there's questions, you know, from the members of the public about, uh, you know, staff control and all of that. So... Lombardo/ I think my recommendation would be, um, that...that the results just be used, you know, as a guide because there are a lot of things that you're going to have to weigh as part of decision-making and...you know, in order to effect a certain level of reduction in one area for instance we may have to eliminate something that, you know, you can't section it out or...or you know, you need to have some level of discretion about how to implement the results or what...what we're seeing and what we're going to suggest for reduction. Um, certainly it goes without saying, you know, that you have a several hundred programs and service points that probably are going to fall out, you know, of this and they're ranked. It's unlikely that you're going to take something off the bottom and... and propose reducing something off the top. So you know, you're going to be looking at perhaps the...the bottom scoring echelon, but you need some discretion for, you know, making decisions. You don't just take the bottom, okay, we need to cut "X" dollars and let's work our way up the list. Um, and...and we certainly can provide some level of guidance and input along the way, and...and help through those discussions, but you know, just saying whatever, wherever the chips fall, here's the dollar amount and then we'll work our way up the list, it may not...it may not be entirely possible. I would...I would suggest to leave yourself that level of discretion, and not commit up front to use it as a firm tool, but... Bailey/ And I think we...we need to, that needs to be sort of a...an on-going discussion (mumbled) I mean... Wright/ (several talking) I think it would be tough to use a tool like this as an absolute, without...without some context, I think you can end up making some...some less than optimal choices. Bailey/ But I've been in, I mean...you know, when I was in a funding situation, we would perhaps score grant applications, and there was an expectation that those that scored highest perhaps, I mean...if we say that we also have to set up that expectation very clearly. That's all I'm suggesting, as well, so we get clear with ourselves and also we are clear with staff and public, because you know, you know the game. If you get a higher score, you're on to State finals. I mean, that's the rule, right? And so we, numbers mean a lot. So... This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 6 Wright/ I would think they would mean a lot in this process, but that doesn't mean they mean everything. Bailey/ And we need to be really clear, and make sure we're clear among ourselves. That's all I was suggesting -not to get ourselves into a bind. Hayek/ Yeah, I mean, I agree. I think it should be the expectation that the numbers will drive the majority of this process, but if something scores a 94 and something scores a 93, as a collective body we really think that the 93 has got to be our priority - I think we have to preserve that (several talking) Bailey/ I agree! Lombardo/ Where the challenge will come is...is, if, uh, there's a series of reductions that's going to eliminate perhaps part of a staff position, and then the...there's a piece of what they do that ranks way up here, and the discussion becomes, well, we're going to cut other things, and then you leave a partial position hanging, the question for us becomes, okay, can we...can we staff that function or that piece of that current position with existing people, or by moving things around. It becomes a logistic issue, and...and so unfortunately it's not as...if we had just individuals who did very few things, uh, or very discrete things, it might make it easier, but generally most staff complete a wide range of duties and functions, and...and touch a lot of different things, and so that's where...that's where some of the challenge and where some of the discretion might come in, in...in terms of, you know, fully illuminating a certain program or position, as opposed to trying to support, you know (mumbled) Wilburn/ ...and several of the larger organizations in the community, I mean, they're going through that now, you know, and the position will be, um, a...an FTE will be, um, a position will be phased out. Some of the duties will be absorbed into other, I mean, that's...the School District's going through that now. The University does that. It's..: Bailey/ And how...what's the process the School District is going through? Wilburn/ Well, um... Bailey/ There's something we could learn there. Wilburn/ And I'm not...I'm not heavily...I'm not the budget person. That's not my responsibilities, but I mean, they're looking at, uh, at a public forum the other night, the Superintendent announced that the range of cuts they're looking at over the next two years, unless there's a change in spending authority, is like $6 to $8 million, and uh, it's um, I...I think the Board gave some input, but um, you know, the Superintendent (mumbled) is uh...his equivalent. Champion/ Can I just say something? This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 7 Bailey/ I was waiting for you to say something. Champion/ ...inappropriate! (laughter) Bailey/ You've been awfully quiet! Champion/ Well, you know, in these times...the economy is really terrible. People are losing their jobs. They're being laid off downtown, um, are we just nuts to talk about hiring ten firemen? I mean, if we're determined to do this, then I think we've got to be willing, I don't know, to cut ten positions. We're going to run huge deficits. We're getting our...whatever they call that, reserve fund, down all the time. I think we've got a...I just personally would like to back off of this for a few years, till things get better. I just...we're...I think we're just saying...well, we're going to have to cut ten positions. We have to staff this fire station. L ..I guess I'm not willing to do that to staff that fire station. When we committed ourselves to that fire station, we did not have these bad economic times. We did not have a flood. We did not have all these huge expenditures that the City is having to put out. I just...I'm just going to put that right up front. I just want to put it right up front. I mean, do I want to close the Library half time? Do I want to get rid of Planning and Zoning? Do I, you know, I can't make those decisions. I...I would like to see us continue because we have to cut anyway. We're already in a deficit. We're already in a deficit, so it isn't that all this isn't important. But I think what the public thinks we're here for is how we're going to fund ten firemen, and I...I simply don't see how we can possibly do it. Unless somebody gives us a huge endowment. Lombardo/ But, let me play devil's advocate to some extent to, um, it is up to us and this body to...to discuss and set priorities for the City, and if our protective services are needed in a priority, we do have to be able to make, I mean, it's not, there's no joy in eliminating positions and reducing other areas, but...but cities have to be flexible enough to say, you know, just because we've done all of this stuff for time immortal doesn't mean that...that it's a reason for...as difficult and as challenging as these decisions are, it doesn't mean we should just kind of keep on doing it, because.. . Champion/ I agree with that. I agree with that. But I already see us in a budget deficit. Lombardo/ Right. I'm not...I'm not advocating one way or another. I'm just, again, playing devil's advocate because it is...setting priorities and really affecting services that are...are meaningful to the community are, there's nothing easy about it, and in...particularly when you have deficits, so I just wanted to raise that. I'm not suggesting you do or don't proceed with Fire Station #4, or...or anything else. It's just...it's always going to be a tough debate, um, and...and the process certainly is going to be difficult, um, because we do have a deficit to take care of, uh, additionally, so I...I, again, I'm not trying to throw you off that topic, Connie. I just...making (both talking) Champion/ I mean, I just...I mean, I just think we already have a budget deficit, and I still want us to work towards that goal. But I (several talking) This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Bailey/ ...from something? Page 8 Dilkes/ No, I...I feel like one of my roles is to make sure that whatever decisions you all make, you make...an informed one. And I just want to make sure that you're all clear that if you hire ten firefighters, it is going to require you likely to terminate ten to fifteen other employees. Now, nobody is saying that a prioritization process is not important. The question is, do you take the firefighters out of that priority setting process? And what I'm concerned about with this organization, is that message says to this organization, nobody here, you've already made the decision that nobody here is as important as a firefighter. Hayek/ Which is why twice before, in recent weeks, I have suggested that the fire station issues be deferred, so that they can be taken up in connection with the prioritization process that we're starting tonight, but we're really not get into in full until after the budget is adopted. So that we can make just that decision. Bailey/ So we can roll them into the process, versus... Hayek/ Right. Bailey/ ...we would by making the decision at the budget, probably do as Eleanor said. We would be taking them out because it would be ridiculous to put them in and then take them back out at a, in a process three weeks later. Hayek/ Well, it allows us to decouple the two...the two decisions. It's easy to make a decision to hire firefighters. It's, they're needed. It's a popular subject. Champion/ Right! Hayek/ It's hard to decide how you're going to get there, and...and who you're going to cut to get there. And those are difficult decisions...there's an easy and a difficult decision, and I think they should be made in concert, personally, but... so I hear you, Connie. I've mentioned this now twice in prior meetings, and it hasn't gone very far. Champion/ So you're suggesting we take them out of the budget and put them into the priority hearing? Hayek/ Yes. Champion/ I could live with that. Wilburn/ The other thing I would add, um, and I...I certainly agree that, uh, that's a statement that Council will be making if we, uh, proceed with hiring and uh, firing. You are saying that's a priority. Um, and that can be challenging. It can be destructive in an organization. Um, I've made statements when, you know, you've said that...that uh, there are...there are many ways to go about prioritization. One is, uh, I have felt, is the public input through various sources, and including topics of elections and discussions This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 9 that...that's, that's a...that's a partially informed decision. If we commit and complete the prioritization process, within a year, um...I would be okay changing my position on that, as long as we do that within the year, and then we go with it. That's not going to take away from any discomfort, uh, if we're going to go through...we're going to go through a prioritization process, and whether they...whether fire is included or not, um, some positions are going to be discontinued. It's still going to be a point of decision, people are going to be uncomfortable. They're not going to know whether they're losing their jobs, again, I just point to some other systems that are going through that right now, the School District, the University, so that piece doesn't necessarily go away. Um, and uh, while there's, uh, and again, I don't know the full process, but I mean the proposals coming forward in, uh, you know, the School District, I mean, that's part of that is, uh, based on some past input from the Board, but staff and the Superintendent is proceeding with...with some of those, part of that plan, after they developed it now. Um, so the discomfort, the, uh, I mean, you see it going on. It's not just going around in this community. It's going on around the state and...and around the country, so...um, if we're not going to complete the prioritization process within a year so that, for the next budget, we know that...then I would not be interested in...so, it's...for me, in order to change my position about that, my belief that we...it's already been indicated through several ways that, um, whether you agree with it or not, that...that uh, opening that fourth fire station, which means hiring some (mumbled) that has been a high priority, uh, through (mumbled) Council, um, but again like I said, if...if we don't finish the prioritization process within a year, with changes, then I would not be willing to...to wait on that. Do you see what I mean? Hayek/ Yeah, I do, and...and I agree with you, um, it seems to me that even if you take the fire station out of the O10 budget, these numbers are still awful, and we will be forced, uh, to go through that process for the 2011 budget. Seems to me. Wilburn/ Absolutely! Hayek/ Um, and I would, I think it's critical that we have, uh, a product, a priority product in place as soon as possible, and I wouldn't even want to put it off until the next budget cycle. I'd like to get it done, and I think our intention is to hopefully get it done this spring or summer. (several commenting) Lombardo/ We've discussed this, uh, you know, our intention is to try and get this done by the end of May, with then some expectation that then we would...we would talk about how to phase in the...the reductions so that, you know, we're not going to wake up June 1st, hypothetically, and say okay, we've identified all these cuts. Boom! They're implemented, I mean, it's going to take time to transition and work with the organization to...to implement so that we're not, you know, making rash implementation decisions. So it's going to take a series of months or longer, and I think that we'll, uh, provide kind of the platform for...for working off of the 2011 budget. Um, but the expectation's we're going to get through that, and that's, I mean, that's why the process that we're...we're discussing is so abbreviated, because we...we at least have heard that you all expect to get through this quickly, and we don't have time to do that...that very detailed. I think This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 10 we can do some surveying, get some feedback from the community, but we can't, I mean, we can't lead a detailed, strategic planning, goal setting process to...to drive this, in this short period of time. We've got to come up with something like this that we can apply and do responsibly, and then...and then run it through the process and use that to make decisions. Otherwise, we'll be at this for a year or more. Bailey/ So, given that information, are...are you willing to roll in the, um (both talking) Wilburn/ I would be willing to roll that into the prioritization process, with the...the expectation that we were doing, we're doing this here within the, you know, the springtime like you're saying. Bailey/ Okay are there others who would be.. . Wilburn/ Like I said, I mean, it's...I fully appreciate what it can do to an organization, but we've got some, we've got some FTE's that are going to disappear and.. . Champion/ No question about it! Even without a (both talking) Wilburn/ ...and so that, so that...discomfort is going to be present in the organization, and it's present around town and the state. Lombardo/ And to further muddy the waters, um, we're...we've been combing through and talking a lot about the...the stimulus package, and what's in there, and there is some funding that is going to be...we don't know a lot of the details yet, but we're told that there likely will be funding for vertical infrastructure and in particular fire stations, and also then there is funding for potentially...for firefighter, uh, or well, cops. There's another safer grant, um, that Andy's indicated maybe available. So there...at some point that will come into play and we can discuss maybe how...we can use some of this to extend, you know, to be able to accomplish the same, perhaps in...with Fire Station #4, in a...in a different manner than what we've...because information is just now coming forward, um... Bailey/ So, I...I just want to hear from others, because we have three who are interested in rolling this in, which is a very different sort of approach, um, so Mike and Amy...I know, Amy, you just walked in. I mean...are you (several talking) yeah. Wright/ Um.. . Correia/ Then I can catch on to what we're talking about. Bailey/ I think you're pretty caught up (laughter) Wright/ Okay, since...this may be a question that's born at least partially out of ignorance, so bear with. We have to have the budget, um, submitted in less than two weeks. This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 11 Bailey/ We vote on it on Tuesday. Wright/ Right. Bailey/ Uh-huh. Wright/ Um, if we leave the firefighters in, for the time being, there is nothing to say at the end of the prioritization process that they could not come out, is that correct? O'Malley/ That's correct. Lombardo/ That's correct. Wright/ Then I say leave 'em in. Dilkes/ The problem is, that's...it's more complicated than that, because you are going...we are getting ready to set a public hearing on the building of the fire station, and I'm...I guess if you're willing to build a fire station and then determine later whether it will be staffed...um, but that's an issue. Wright/ Could that also not be deferred from the public hearing, or defer the public hearing (mumbled) Bailey/ ...Amy? Are you caught up? Correia/ So, is the question whether we include discussing the firefighters as part of the (both talking) Bailey/ Why don't you restate, Matt, your position. We've, I mean, I know we've heard it, but why don't you restate your suggestion. Hayek/ Well, I think if you...I think if you, if we left the budget in its current form, and funded the fire positions, and we moved forward with the fourth fire station that would still be part of the prioritization process. Correia/ Right. So is the issue whether we have the firefighters in the budget, that we're voting on? Bailey/ I think when we basically talk about it, because I'm hearing you say that by putting the firefighters in the budget, we've already indicated our priority, that fire...staffing the fire station and jump in if I'm... Hayek/ Yeah, yeah, yeah. Bailey/ By staffing the fire station, we've indicated that that's a greater priority to us, and we will as a result, set that aside and look at everything else to enable this to happen. This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 12 Champion/ Yeah, that's...that's well put. Bailey/ And so the question that Matt has raised, and he's raised it before at meetings, is do we pull this in, and do a full organizational prioritization... Correia/ Oh, okay. Bailey/ ...or do we say, these are untouchable. We'll balance it off with looking at a partial. Correia/ I guess I would say...nothing's off the table. I mean, I think that we've been talking for three years about that we have...that it's a priority to try and add in the fourth fire station, and so we attempted to do that through our budgeting. That's where we indicate where our priorities are. I think that the budget that we are, would be voting on...um, you know, at the point that we're voting, everything's a priority, right, because we're voting on it. We think all these things are a priority, and we're going to, we have committed to go through a process of really thoughtfully going through everything, so I wouldn't say anything is off the table. I...I think that the information...of, in that prioritization process, but I also think that we, there is new and emerging data, information about the stimulus package because I would say anything that's on the table we would say...potentially is a priority and if we can fund it in another way, you know, that's...that's apriority, you know, so, um, and the challenge then is identifying what are things that if we can't fund another way, besides our General Fund, that we're going to identify, you know... Bailey/ I...I agree with what you're saying, although I have...I think I said before you came in, it seems...like a questionable move, however, to fund ten positions, and then with...through the prioritization process and perhaps take away what you did two months before. It sends some unclear messages, and so, um, and I've...I've been a proponent of slamming forward on this, um, but if people are interested in having a full organizational prioritization, the position makes sense, is to...if you say nothing's off the table, by approving it in the budget, it seems that we are sending a message that something is off the table. Wilburn/ Because you can't, you can't, uh, you can't...you can't approve a position, hire, and then later in the spring, I mean...rip those... Bailey/ And I'm real concerned about this, I mean, this is a process. This is also what we communicate, through the process and also as we move into it, and I think that's going to be critical, because our...our major institutions have to approach this very carefully, because we...we're signals in the economy, probably more so than, I mean, a university, a school district and a city, we are large employers, and we're a huge bell-weather and we have to make sure that we're proceeding in a very careful manner, even if we are concerned. So...I don't know. This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 13 Hayek/ I hear what you're saying, but this is such a unique year, I mean, this is a year in which every single recommended position, save the firefighters, is not getting funded. Um, it's a year in which, even if we don't fund them, we're going to have to make, in all likelihood, numerous staff cuts, um, it's a year in which we have lost something to the tune of a million and a half dollars in interest income along, which would fund two fire stations. Um, and it's a year in which, for the very first time in recent city history and maybe perhaps ever, we're engaging, we're forced to engage in a prioritization process, um, above and beyond the normal budget cycle. It's such a unique point in time for us, financially, um, and...and I worry about the institution-wide impact, morale and otherwise, uh, of...of adding those positions only a month or two or three before we create this hierarchy, and I don't doubt that the fire station'll come out on top or almost at the top, um, personally. Uh, but...and I also think that...aside from the morale and...and those softer considerations, Imean my sense from staff is that it creates a real, uh, challenge to...to do this, only to turn around and...and go through this process in May or June or July. Wilburn/ That's why I was just saying, as long as we're committed to doing that process, I'm willing to...go, roll with those changing conditions this year that you're pointing out. I do have a question, though, and, um, just thinking ahead further too. Um, in terms of, um, at the point...after the prioritization process and we, uh, make adjustments and then, uh, you know you would have to work with your department heads in terms of attrition and absorbing and re, uh, structuring type activities, um...is it, I know some, uh, some organizations will, uh, you know, if they give the pink out so some folks, they maintain essentially a, uh, a priority list in terms if...if you know, if something comes through the stimulus and folks are...a call-back list I guess is what, is that something that you would take a look at? Lombardo/ Yeah, I think we would always entertain, I mean, if the opportunity presented itself, even if positions opened up elsewhere in the organization and we had given employees who were ready to come back, they would be in strong contention for the positions, you know, it'd be a matter of clarifying whether their skill set was...was applicable to the job or not, I mean.. . Dilkes/ ...picking up his microphone because we have union bumping rights, etc., etc., that kind of... Lombardo/ Depending on the positions. Dilkes/ ...can really change the whole... Helling/ Yeah, there...there are pretty strong bumping rights, and...and rehiring rights in the contract, as well, within a certain time frame, um, the...the skills do come into play, but...if...if there's any way that the case can be made that those skills are there, then the contract (mumbled) Lombardo/ Okay. This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 14 Correia/ I mean, I certainly feel like we are talking about this priority...and maybe we're initiating afast-track on this priority setting process because of the shape that the budget's in, but I believe that as a Council we talked about, have talked about this over the last few years of...of um, I think all organizations benefit from looking at...what the priorities are. I mean, it's...the status quo, a status quo organization over a long period of time isn't responsive to...to changing conditions, changing community, um, you know, lots of different things - I'm sure I could be more articulate about if I haven't just worked 12 hours already today. Um, so, I mean, I certainly...I'm sensitive to issues in the organization around fears about job losses, um, I think that there are ways to try and manage that, for managers to manage that, knowing that there are a lot of things that are outside, you know, outside the control of...of, um...of how people respond, but I mean, I think it's appropriate, you know, for the Council to set priorities on services, within both a year where part of it is due to we don't have...not being able to cover everything, but also in a situation, in an environment of "there's going to be..."....There's dollars coming down. We don't want to just scramble for every single thing. We need to prioritize - what are...you know, what do we want to initiate, trying to find other dollars for. So I mean, I...I think that... Bailey/ Well, and the question really, I mean, came up about...I mean, it is...I'm maybe oversimplifying it, but leave the firefighters in the budget, or postpone that, and go through the prioritization and that fundamentally is the question. I mean, yes, I think that the prioritization process is a good thing for any organization, regardless of budget situations. Correia/ Can...I think we leave them in. We don't hire anybody until we go through this prioritization process. I don't know that...we're not talking about leaving them in, hiring, and three months later laying people off because it didn't rank high, are we? Are we talking about... Lombardo/ What...what I think...let's put into context though what...what you're doing when you adopt the budget, and really the...the bottom line is that you're setting a tax levy for...for the coming year. Once said, you can adjust the budget as much, as often, and in ways that you like, I mean, that's your prerogative. So I appreciate, you know, in terms of the adopted budget, you are perhaps sending a signal in terms of what your intentions are, but we adopt the budget frequently throughout the year and you all are at your discretion able to adopt it however you see fit, so I guess there's...there needs to be some soul searching in terms of what...what it is you're saying with adopting the budget, because from our perspective, the bottom line is that we're...we're setting the tax levy and in terms of how much money we're going to raise, be it different methods, but...but the rest is up for discussion, uh, through you all. Bailey/ Well, and L ..I've been the strong proponent of...of moving ahead on this, and I still think that it will come out as a priority, but Matt, I was wrong. I think we should roll it into the priority setting, and I think we should remove it from the budget. I mean, I just think...I agree with Ross. If we're going to do this in the time, um, setting.. . This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 15 Wilburn/ A timely fashion. Bailey/ Yeah. We should do a full organizational priority setting. That seems the most fair way to proceed. This is frightening enough to our community, and I think that that's the most fair way, and I...I'm glad you brought it up again. Though I don't know what that means for Tuesday, but.. . Hayek/ What does that mean for you guys? O'Malley/ Well, um, we could lower the, the tax rate, but that might bind you then, if you do put the firefighters back in we might need that revenue. So we could just go ahead and adopt it, and then make the amendments on July lst. We already have one amendment, uh, pending, and that's the, uh, million dollars...that we're going to borrow from the Landfill instead of taking it out of fund balance. Lombardo/ ...minimum I'm going to tell them to slow the process for the construction, absolutely, um... Bailey/ When were we going to do the public hearing for that design? (both talking) Lombardo/ ...they're getting ready to let the bids, um, so I mean, I... Bailey/ And bids are good for how long? Sixty? Lombardo/ Thirty or sixty... O'Malley/ I was just talking to them today, and because of the stimulus package, they're going to push it back a month. Bailey/ Okay. Dilkes/ Kevin, I just have a question. Can you...can you not change the tax rate, I mean, just...in terms of paperwork-wise, take the firefighters out and just increase the surplus? O'Malley/ Yes. Dilkes/ I mean.. . O'Malley/ We can...we can always lessen the budget. We can't increase the budget. Dilkes/ Right. So I'm saying... Champion/ ...keep the same tax rate. O'Malley/ Right. This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Champion/ But take the firefighters out. O'Malley/ Yes. Champion/ Yeah, that would make me very happy. Hayek/ Are you talking about the emergency levy? Or are you talking about.. . O'Malley/ It's a combination emergency levy, and the, um, employee benefit levy. Page 16 Lombardo/ Because remember, we juggled a lot of things around, including the debt service levy.. . Hayek/ Right. Lombardo/ ...to get to where we are, and so... O'Malley/ But, Matt, that's on the revenue side. We probably wouldn't touch that. We'd just go on the expenditure side, and reduce the expenditures, and therefore, the fund balance would go up. (several talking and mic feedback) Lombardo/ Or the deficit (noise on mic) O'Malley/ ...reduced. Champion/ I can live with that. Correia/ So what...was that a side conversation? Bailey/ It was about bicycling. Hayek/ So, what are we, uh, what are we doing here? Champion/ We're going to take the fire (mumbled) but leave the (several talking) Wright/ There's a consensus...I'm not really with that, but you all... Champion/ I would leave...but I would leave the levy the same. O'Malley/ That gives you the latitude to add back in. Champion/ Uh-huh. Hayek/ Now, once upon a time, you probably dust off your earlier versions, I assume you can get to this by next week, with these.. . This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council O'Malley/ That's correct. Lombardo/ That's... Bailey/ The advantage of computers, right? O'Malley/ That's right. It's all computerized. Champion/ I really appreciate this, Council. I was...I was really not going to vote for that budget. Page 17 Bailey/ I just really think that this is the most fair approach, and I'm very uncomfortable, um, well, we're all very uncomfortable. We have a lot of hard decisions to make. Wright/ I hope we hear loud and clear from the community. Bailey/ We will. Wright/ As to whether or not this is indeed a priority (mumbled) has made it a priority for some time and... Bailey/ But I think that what Matt said, and I...I think it will rise to the top and...and that seems like also a more fair process. We have heard from the community. I think the prioritization process will affirm that. I mean, I got an email today (several talking) don't cut it. Wright/ Yeah, I have never heard anybody say to cut it out. Bailey/ Yeah, and (several talking) I understand. Wilburn/ So, I apologize to...staff for your preparations, but again, I...if we, um, we...we have to hit this this spring, and uh, um, so just apologize for the extra last minute (both talking) O'Malley/ It's not a problem. Wilburn/ And, uh, and I will reiterate that...that at some point, there's going to be...there's going to be, uh, you know, some disruption in the agency. There's going to be anxiety. There's still...there's still going to be anxiety and...and maybe the organization will feel that, um, it was a more fair process, um, but we're not going to escape, uh, fear of job loss this year. Lombardo/ And...and we've heard your desire, I mean, I'm going to be looking at whatever options come before us to try and make this happen, and we still...I see that as a clear goal for you all and I'm processing, I have to say, this is (laughter) not on my notes this evening, and so (several talking) talking about, uh, preparing for tonight, so I'm a little This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 18 thrown off balance, but...(several talking) I'll adapt and uh, and we'll go. Um, shall we get back to, I mean, I think we have pretty clear expectations for what you want to see on...on Tuesday, and then how to roll this into the process. Uh, one of the considerations that you all should make are, our revenue options on the table. Would...do you expect as part of any prioritization process or fixes to (mumbled) deficit situation, do you want to see recommendations for us on...on increased fees or...or fees that we do not currently charge to help bring in additional revenues? Are other revenue options something you're willing to consider, or...or not? Correia/ Well I think one revenue option that came up at a...Council meeting was the fire inspection fee for businesses. Lombardo/ I think, I mean, I think we're not prepared really to talk specifically tonight. I mean... Correia/ But you said... Bailey/ Sounds like you're interested in looking at the increases. Lombardo/ I've started looking into that (mumbled) Wright/ I think certainly if we, you know, if there were some other opportunities for (mumbled) at least discuss it. (several commenting) I mean, I think, you know, as part of this overall process, I hope we're going to be looking at just all-purpose cost cutting throughout the organization and in ways, other than prioritization. Lombardo/ Absolutely. I...I've, there are a couple departments already that, um, in terms of how we utilize, uh, summer help in some other areas, looking at...wanting to look at, um, how...are we efficient in terms of how we handle that service or not. It's a struggle, given what's happening in some departments and um, you know, the loss of the department director in one and you know, it's a challenge. We've got to be sensitive to a lot of needs, but I do want to look at how we approach our service delivery and make sure that we've looked at a lot of ways (mumbled) Wright/ And any personnel costs that we can save along the way, as well. Lombardo/ In your packet, um, you'll find an "at a glance" and I have a couple copies of the memo that I sent out to department directors, kind of explaining what we're doing to really scrutinize positions as well as travel and all the...so we are looking at that. Um, question, and this...this will appear as a pretty straightforward question to answer, but there...there are some strings with it, and...and that is, is outsourcing or privatization, uh, something to consider? Should we be putting that on the table? Now, we understand that there are a host of...of union and bargaining agreement issues to...to attend themselves, so I'm not making any, um, supposition about what is possible or not. I just want to know from you all in terms of philosophical position, is that something this community and... and this Council are willing to entertain or not, because I don't want to spend a lot This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 19 of energy and time looking at that, if it's not something philosophically you all are willing to...to give much consideration to. Wright/ Could I ask for some clarification on that. Outsourcing in terms of, um, taking work that staff do here, and then removing those positions, or...(both talking) taking those positions and utilizing them elsewhere? Lombardo/ No, um, things that current staff do, hiring a company potentially to do for us and eliminating positions. Or...or putting them, a combination of putting them to work in other parts of the organization. I don't...I don't have a context for saying specifically what would happen to them, but the ideal behind privatization is XYZ Company can mow your lawns and empty your trash, or do whatever. We could potentially contract with them at a lesser rate than what it costs for...and we'd have to see. I don't...until you bid it, until you identify it, um.. . Wright/ If we're doing this exclusively to save...to cut staff lines, I'm not sure I'd be interested in that, but I don't know how other folks feel. Champion/ Well, I philosophically don't like it; on the other hand, I'd be willing to look at it. I think sometimes outsourcing does save you money. For maybe the wrong reasons. But it...it does save money a lot of the time. Wilburn/ I think some of the potential risks. You...there's certainly a quality control factor that comes in, in terms of, um, you know, we've got folks in-house and we have a managerial system for, uh, being...I think can be more responsive to, you know, some of the public expectations about the, uh, services that we're getting. Um...certainly you want to, I mean, you open yourself up to, um, I mean this could happen with just general bids and things that we get, that uh, um, there's potential more, um, litigation or threats of litigation involved if we have to hold someone that we outsourced to accountable, I mean, I know we have contracts and things like that, but um, I'm just...I'm just throwing these things out. Um, in terms of, um, you know, relationships with our unions, that certainly can make things more, uh, challenging at times, or uncertainty, uh, your concern that you're going to, uh, eliminate, um, you know, those so...what impact that may or may not have on negotiations, you know, who's to say. Correia/ I mean, I think...I can't just sit here and imagine anything that we would outsource that we think we would be getting better customer service, I mean, better service to our customers...to the people of Iowa City. I mean, I think that's...and of everything that we, you know, how do we best provide the service in the most cost-effective way. I can't imagine that outsourcing is going to get us as good a customer service as, you know, so I mean, you know, something that would come to mind would be like billing, but just because you know, lots of times billing happens somewhere else and maybe you don't have a person, but I think there's a value for people to be able to talk to somebody here in Iowa City related to bill, you know. This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 20 Lombardo/ And we run pretty lean. I'm not even...I'm not even certain that we could bid something out and save a tremendous amount of money, and...and you're right. I'm just trying to get to the dialog. Is it something we should be...looking into or not. Bailey/ I think philosophically Iagree with Connie, but I have...I'm not interested in exploring it, on the other side of it. Champion/ I'm sorry? Bailey/ I think philosophically we're on the same place about this, but I think I'm coming down...I'm not particularly interested in pursuing it. I would...well, it's...it's... Champion/ We already outsource a few things. We outsource some (several talking) Bailey/ Well, and L . . Champion/ We outsource our towing (noise on mic) a tow truck! Lombardo/ Let me...by way of example, and...and please, this is not a...a suggestion or an attack on the City Attorney's office, but many municipalities outsource their...their legal.. . Bailey/ That would cost us more than... Hayek/ ...used to outsource it to my father! (laughter) Bailey/ We don't even want you talking about this! (laughter) Lombardo/But having said that, I...I mean, the level of...of attention and...and professionalism, and what we get out of on-staff legal department, you know, I'm not sure you can replace by outsourcing. You can save money. Bailey/ I've seen cities that outsource that. I don't want to be one of those cities. Wilburn/ That's that quality thing that I was talking about. Dilkes/ You won't save money. You might get someone better, but you won't save (laughter) Wilburn/ I mean, because there, I mean, and I think there...there's public expectation for a certain service, I mean, there certainly, uh, garbage pickup can be outsourced, you know, not every city has, runs their own water, I mean, you...you... Bailey/ But Connie's point about...it sometimes it's a lower cost for all the wrong reasons. I...I want to make sure we're not...I mean, it's the philosophical issue, I mean, we pay benefits. We pay good wages, um, and...and that's, I think that's...that's important for me, and...and...(several talking) This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 21 Lombardo/ I don't raise it from a position of advocacy, but I think we would be remiss by not (both talking) Bailey/ I agree. I think it's good to get everything on the table. So, are we in...Matt, you haven't weighed in, or do you.. . Hayek/ I would be open to looking at stuff. I don't want to...I don't want this to dominate, if we did it, to dominate staff time. I think there's so much budget related to be done, um, but I...I'm not opposed to looking at it, uh, because I...we're just talking theoretically at this point.. . Bailey/ And I think generally L ..I (both talking) yeah, I think generally, I mean.. . Correia/ And I would say.. . Bailey/ If we don't get down to that (both talking) Correia/ ...right. I mean, I was saying as you're working with department directors to, you know, not to say, no I... not to say if you have an idea about outsourcing that we would say no, I mean, if that bubbles up, but I wouldn't say...we want you to spend a lot of time at all sorts of staff levels looking into this. Bailey/ Do you get a sense of the gauge -okay. Lombardo/ And I'll tell you too, we've implemented kind of a...an employee, um, suggestion box type thing, both electronically and then there's a physical box out there, so that, I've already asked them to, you know, look under every rock. If there's a way to do things better from...and I've got my first stack that I need to review, and see what's in there, um, but yeah, we're looking at this from a lot of different angles, and... O'Malley/ We, just to give you an example, the Finance Department has outsourced different jobs over the last ten years. Used to have our own supply...office supply in the building, and with the use of the web and...and Staples and all those people, it was senseless to use up that space. So, next day service we get from, uh, Staples and Corporate Express. So we got rid of that. We used to do our own printing. It got too expensive. PIP provides pretty good, uh, printing, plus they... so that's something we've used in order to continue to provide a good service, at an economical cost. And we have lost positions in our department because of that. Lombardo/ And as we implement the new enterprise accounting system too, that's going to allow us to process for engineering and shifts and (mumbled) you know, the expectation is that over time, you know, we maybe able to skinny up positions, or redirect them to do some of the things that are falling off the table now. So I...we are, we're looking hard at the organization and how can we...we really improve how we do business and...and make sure that we're...we're able to stand behind what we do. Now, um, is there anything else This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 22 that you...the next piece is probably going to be the hardest part, and I contemplated whether or not to bring this up at the beginning or the end, and so we'll find out here shortly (laughter) whether...whether my guess was a good one or not, but that is really coming to some consensus, agreeing about what the goal is, and how much we will have to cut. Um, I think it's...it would be very helpful to us to...to see if we can come to some level of agreement about...about what it is before us that we're about to do. Um...and you know, the spreadsheet that you have in front of you, um, helps paint the picture, but it's not the entire story, um, I look at this and I look at the situation we're in and I...I...I think that, um, without the fire station we have somewhere on the order of...of $500,000 to a million dollars that really should be cut over the next...year to 24 months. I mean, to look at, and the way I say that is, you know, we can...we can decide that up front and just start making cuts right out of the gate, or we can...we can look at a certain level of...a comfort level of perhaps $500,000 to $750,000 and then have the next tier kind of available in there, and then build in checks along the way to say how are we doing, as our...as our broader revenue picture improved, are there other ways or other things that we can do to...to allow us not to implement further reductions. I mean, you know, but this'll be an ongoing dialog with...with some very clear checks back in, you know, in terms of...before we move forward with additional costs, but I think at a minimum, um, finding the solution for the next two years of deficit, um, is important and then really looking at what does that mean in terms of the outlying years, and being ready to...to implement the next wave of...of $250,000 to $500,000 in cuts somewhere in that range, I would presume, if things stay markedly bad. (several talking) Hayek/ ...from the perspective of, uh, reserve balance? O'Malley/ I think that's what we had in prior to setting goals is, what level do you want the fund balance to continually keep dropping off, where do you feel is a solid fund balance? Hayek/ I mean, if we...if we drew a line in the sand on that, wouldn't that drive, uh, the numbers? Lombardo/ Absolutely. Champion/ Well, I'm willing to drive a line, I'm willing to draw a line in the sand. (several talking) Bailey/ What's the line? Champion/ I don't know what it is, but I think we have to.. . Bailey/ Well, if even I get...am getting nervous, it's, I mean, and (several talking) comfortable. Correia/ 17% is really the lowest. Bailey/ 20...20% is probably getting to my, uh, palpitation level. This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 23 Hayek/ Put it in perspective, in...from 2007 to 2010, it is going from, projected from 40% of expenditures, down to about 20 at the drop of...of half, I mean, three years. Bailey/ 20's my basement. For me, and I know others are.. . Hayek/ Our policy says it won't be more than 30 or less than 15. Correia/ 20's good for me. Hayek/ I would...I could live with 20. Correia/ Uh-huh. Hayek/ And I...I'd like some input on... Bailey/ But, I know that I'm basement, so I want to hear from others. Wilburn/ 25 is where I was (mumbled) Champion/ I like 25. Hayek/ I...I....the more the better. (laughter) I mean, I believe in having as high a reserve balance as possible, um, politically I don't know if we can get to 25. I would support 25. Correia/ I don't know if I agree as high as possible, I mean, I think that (several talking) right (several talking) Wright/ I would be comfortable with 20. Champion/ 20's too low for me. 25. Bailey/ 22.5? Do I hear 22.5? Hayek/ Can we get...I know it's... Correia/ No lower than 20, around 25. Bailey/ Yeah, ideally 25 (both talking) Champion/ That's too easy. Bailey/ No it's not, because if somebody like me is getting nervous when it's approaching 20, you know that other people are like...(laughter) do something. (several talking) Lombardo/ At 22% I'm starting to get nervous, um, I would...(several commenting) I'd be able to sleep at night with 25. This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 24 Champion/ See? Lombardo/ Um... Bailey/ Sleeping at night? Lombardo/ ...I'm...I'm maybe four out of seven nights now with...you know, 22, um, and I think I say 22 with the expectation that we're going to be working hard to...to try and...and increase that, when time allows, um, I don't...22 worries me. We have another flood event, I mean, a million and a half of fund balance gone this year, um, and...and that is only because they declared a disaster and we were getting FEMA funding. I can picture a fairly significant flood event where they don't declare, and FEMA money is not coming, and we're in really deep. (several talking) Bailey/ Yeah. Or...an ice storm or a small tornado or... Champion/ Well, the big one... Bailey/ Well, I think you have a range with this...20 to 25, and... Champion/ I don't want a range. Bailey/ You want to know what... Champion/ ...aline in the sand. Bailey/ And...then my question is, our policy is...allows us to go down to 15. Do we also want to change that policy? (several talking) Champion/ I never supported that policy. Hayek/ You can't...if we go this route, we have to change the policy. Bailey/ Yeah, well, put it on our list. Hayek/ I'm supportive of 25. I would like to know... as, you know, in terms of our bond rating and the risk of losing the triple-A, uh, level, um, can you calculate, estimate what the odds are that it would, you know, how much we hedge against that by going (both talking) O'Malley/ I believe it's a significant amount, uh, there's three...(several talking) there's three...yeah, there's three legs to the stool, financial stool. One of'em is your cash balances. Second is how fast you pay back your debt. We've always had a ten year, uh, repay, uh, repayment so that...that leg's pretty solid. The third leg is the local economy. So, if you have a high fund balance and a terrible local economy, you'll probably still get This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 25 a triple-A. If you have a low fund balance and a terrible local economy, you got a shaky stool. (several talking) Wilburn/ ...I've been looking for that answer for nine and a half years (several talking) O'Malley/ ...they won't tell me either. Lombardo/ What...what we don't know, and...and let's...let's kind of call it for what it is. What we don't know is how they're going to hold Iowa City up in light of the rest of the country who are struggling as bad, if not worse, than what we are. And so, if...if they hold up what's happening locally in light of the broader economy, then we show some relative strengths. Albeit we're in a tough spot, we do show some strength, compared to the rest of the national market. Now, you know, they could...they could go through and nationally say there's nobody that qualifies for triple-A bond rating anymore because the...the broader economy is such a mess. I don't know that they'll do that. I do think there's some level of comparison about relative strengths to other regions, but...but it goes into that mystical box, and.. . Wilburn/ There's also some that, uh, I've heard some bru-ha-ha about there, about just the...the rating folks anyway giving the Wall Street and the market and (several talking) does it really...their opinion really matter anymore. So... Hayek/ ...objective if they're (several talking) Lombardo/ So how...what do we, I guess, have to provide you to have you feel comfortable or come to some decision about the level of cuts that we're going to target for this initial round? Or...or to get to the end game, I mean, we can...we can bring up the spreadsheet and...and plug some numbers in and kind of show you what that would mean, and that would mean now you have to back out (several talking) model from before without the fire station in? O'Malley/ I can reduce, uh...the fire station is about $500,000. Wright/ It would make sense to me to come up with, uh, cuts reflecting aworst-case scenario, because you don't have to take them up to that level. We have priority setting in place, or we will have, um...that way you...you save from having to repeat the process as numbers change. O'Malley/ That's correct, Michael. I thought I looked at it, uh, we have our working capital, which is about 17 to 18%. We don't get our first payment until October, which is almost, uh, 25% into the year. Okay, in the old days when I first started working, you couldn't buy any capital equipment or do any large purchases until after we got our first tax payment. Sometimes they even talked about borrowing money. So now you're paying for your money. That's something you don't want to get into. So, 15% to 18% is the threshold. Now you have...what do you have...you need money for opportunities that This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 26 come knocking at your door, and for calamities that come knocking at your door. That's, you know, that's gotta be a comfort factor to feel good with. Champion/ Well, what are you suggesting? I mean, do we want to cut...you want to cut a half a million in the next budget, in this budget year? Do you want to cut 750? Lombardo/ My feelings are that...that based on the economy as we know it, and...and the current world, um, that at a minimum a million dollars, somewhere between a million and a million and a half really projected should be coming out of this budget because if you look beyond FY14, you know, it...it's back on the climb, um, now I don't know that we need to implement that level of cuts this fiscal year. I think if we were to look at somewhere on the order of...what'd we discuss, Kevin? 750,000 initially, um, and even phase those in and just keep...keep our eye on what is happening every step of the way. Before we move on to the next progression or restart implementing additional cuts, we're...we're having a reality check, and a discussion about it. It's that fluid. Bailey/ And that's what I would...I want to jump in at some point. I...I marked this down as...we do need our dashboard measures to check in. We kind of talked about that last year. We never...we didn't do that. We didn't keep an eye on the budget like we had all anticipated, but we need some...some short, clear, how-we-doing measures, and...and in this process I hope we figure those out, and I hope we see those on a monthly basis, just like any other policy board would. I know we see a lot of budget information, but we need something that gives us a... O'Malley/ ...dashboard the fund balance. Bailey/ Yeah, well, the fund balance is among them. I don't think that that's the only thing. O'Malley/ Well, that's what I was trying to figure out, because the fund balance is what everybody talks about and is concerned about. How the...the other dashboard items would be how well is the police department doing against what...we don't have a strategic plan to say how they're doing against. Lombardo/ We can...we can look at are... Bailey/ Expenditures to budget. Lombardo/ ...expenditures to budget. We can be looking at (several talking) revenues to budget.. . O'Malley/ We amend our budget based on our expenditures. It's almost fiction. If we're going o spend another 100,000, we come to you with an amendment for 100,000. You approve it. How does that...make a, make it a meaningful statistic? Lombardo/ I have a...a couple, I mean, when I was formerly a finance director, I have a couple quarterly finance reports. They were...they were just a couple pages of summary-kind of This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 27 numbers. I think what you're all interested in is just something to respond to, to give you some level of indication of...of where (several talking) Bailey/ ....that...that cities use? I mean, certainly companies use financial ratios. What are the measures, the financial ratio measures, that...that cities standardly use? We don't see those either. Lombardo/Because there's not. O'Malley/ Well, no there are, there are actually. We use budget to actual (several talking) every month. Bailey/ ...revenue to liability ratios, you know, whatever, I mean.. . Hayek/ We're kind of talking over each other here, why don't we... O'Malley/ Yeah, we use budget to actual every month. We look at a...property taxes coming in on a timely fashion. Our...our, if this is the, uh, third month of the year, have we spent 25% of our budget, etc., and we look to see if any of those are outside those realms. We didn't know you wanted that granularity, per department. Bailey/ I don't think that that's what... O'Malley/ But then when you get down to what is the big picture...big picture, is what is the fund balance. (several talking) Bailey/ ...my checking account to tell me how I'm doing financially, and that's not as solid (both talking) O'Malley/ But no, I'm just saying the revenue, that spreadsheet showed you the revenue and showed you the expenditures, compared to budget. Correia/ I'm lost a little bit, I'm sorry, about how this relates to identifying priorities. Bailey/ Well, I think that...I think that it's a...for me, it's akeeping-an-eye-on-the-ball. If we identify priorities, but we're also identifying budget cuts, and we have to continually look about how we're doing. Not about performance measures, but financial performance measures. I mean, because we talked about watching that last year, and we didn't. Correia/ Right, right, but I mean I, I mean I do think though, well, I don't know. I mean, watching the numbers is...I mean, I think that's important for monitoring where you are, but it doesn't give you a sense of...of...it's not necessarily a way of identifying what the priorities are, how you know that you're... Bailey/ No, it's a...it's a...I was thinking of a check in, I mean, in all this discussion process is how are we going to continue to keep an eye on our...our financial numbers, and if This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 28 everybody agrees that (both talking) right, but as a policy board, I mean, we should have some kind of...that's a little bit more...we agree that these, I mean, and if it's fund balance -it's fund balance. Correia/ Right. Bailey/ But...it's a little bit big. Lombardo/ ...goes without saying we're going to come to you, immediately, but I think what you're asking for is something on a fairly...and I've done it quarterly and it seems to have worked, but if you're...(both talking) provide you something to respond to. I think I can work with Kevin. I have a good...it's summary information that at least gives you, rather than pouring through the...the volume of reports that we have in-house, I don't see any of you doing that on a regular basis, but it's just key information. I can...let's, we'll come up with some ideas and...and at a work session run it by you and say, is this what you're... Bailey/ And if it's not important to other people, I'm fine with that. It's just something that helps me, I mean, from my perspective, just helps keep a... Hayek/ It is, but I feel like we're in excellent hands, and I think the...the fund balance number really is the critical (several commenting) because you know what is in your bank account does matter, and...and uh, because of opportunities and calamities that come along, and with that being the starting point, um, we know what has to be cut to get there, um, and I think we work backwards from that position. Wilburn/ And I think...for me, it's...it's that the fund balance, because we're not like anon-profit where we're not, where our income is fluid, um, you know, our...there's more of a rhythm to our expenditures than there is to our income, plus there's...there's more, uh, um...this may not be fair to the non-profits -there's more, um, regulatory oversight here, so I'm not necessarily on a more regular basis. Now, if something unexpected comes up, then I think we have a history of hearing that, you know, if...I don't know (several talking) O'Malley/ ...expenditure. We cannot spend according to State law the money we (coughing, unable to hear) to prepare for the flood, unless I came to you and asked you, do you want to spend the $7 million to fix the flood. We have to have that authority. Lombardo/ Over time, I...I have every intention of...of implementing a system of outcome measurement for this organization and tying it to broad community indicators, that give us the ability to say how are we doing, at any given point in time to...and reporting that out to the public, so that we're being accountable when we're saying, we're willing to look at ourselves in terms of efficiency and effectiveness, and...but that's going to take time, and in this environment, it's not something, a project or a movement, that we're ready to undertake. I mean...staff are getting, and I, are getting a little crispy around the edges in undertaking that massive of...but I think there's some data that...a data summary report that we can create quite easily, provide to you quarterly just so it's a mater of checking in and it gives us a chance to dialog about organizationally how are we doing. And...and This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 29 it's not, I don't see it as being overly burdensome. So we'll...we'll do that. I'll work with Kevin. I have some real, I think, easy thoughts on how to get there and.. . O'Malley/ Just from a historical perspective, we used to do that 20 years ago when we had a strategic plan. We had outcome measurements. Once the strategic plan faded (mumbled) reporting aspect. But we still do the financial reporting inside and present it quarterly investment reports and budget (mumbled) Lombardo/ So, getting back to...the mountain. Are you (several talking) O'Malley/ I plugged in a half a million dollars all the way across, and you can see the bottom fund balance page, on line 89, how it changed from what you have in front of you, for FY10, it went from 22% to 23%, and FYl 1 from 23% to 25%. Unfortunately, that half million dollars isn't enough going out. So it's going to have to be a number more than a half a million dollars. Lombardo/ And what's not reflected there, and I kind of opened up with that as part of the dialog, is of the $3.5 million that we cut, there are things that we can put off for a little while, but there's...there are some things in there, and...and I don't have a good handle on what things. You know, it's going to take some work with staff. There are...there are capital outlay projects, there's equipment replacement...there are things in there that has to get done eventually. And so there...looking to the, to the low side is going to create added pressure in outlying years to cut more, and so I would...I would, as Kevin suggests, I would look at a number upwards of...about 750 to 1,000 or so, um, as an initial point of reduction, and then you know, build in the mechanism, identify the volume beyond it, and then through the prioritization, we can be ready to implement additional cuts, but.. . Hayek/ Is your number 750 or is it higher? O'Malley/ I think it's a minimum of 750. Lombardo/ I think it's a minimum of 750. I think probably closer to a million would...would give me the comfort level with outlying years that...that we have some breathing room. Correia/ When you put 750 in your module, what happens? Hayek/ Does this model assume, uh, inflationary change each year? (several talking) Champion/ Might be deflationary this year! O'Malley/ That's true! And, what this model doesn't assume is that the people we lay off, I'm not sure...we're in what we call a reimbursement basis for, uh, unemployment. So we won't probably be out from under that for another six months (mumbled). Lombardo/ (several commenting) Now, keep in mind too, in the 2010, that surplus that's showing there is...is a fallacy because that presumes that you're going to implement those cuts on This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 30 July 1, and...and realize the benefit of them immediately. And that's not going to happen. So, 2010...you know, um...(several commenting) Bailey/ No, we'll never get there. (several commenting) Lombardo/ I mean, we have a re...a fairly balanced budget without the firefighters. It's going to come down to how we implement, if we implement them and when we implement additional cuts, and...and so... O'Malley/ And any revenue increases. Lombardo/ Right. (several talking) Hayek/ Let's decide on a number here. Champion/ 750 to a million. Bailey/ Well, we continue to advocate for alternative revenues at the state, but I'm not optimistic, are you? Agreed? (mumbled) ...to authorize, legislatively authorize us to have other revenue sources. Yeah, not (mumbled) Correia/ I have 750... Wilburn/ Well, and the thing is, as other counties adopt what's available, the fewer counties, uh, you know, uh...it's time...it's time limited, but Linn County has a local option sales tax now, and so we're, are we the only one now? O'Malley/ Des Moines and us. Wilburn/ Des Moines and us, so as fewer counties are impacted, there's less motivation from the legislature to consider other alternatives, if you're not taking advantage of the options that you have in front of you, so... Hayek/ Does 750 get you guys where you need to be? To not sweat? As much...(several talking) Lombardo/ ...starting point, you know, it's...there's so much that is unknown. I think at 750 we're going to be - I just wrote myself anote -we're going to be looking really hard at revenue options. To come and say, how do we make up the difference between 750 and a million, and through possible revenue options, and really advocate strongly for...for that. Um... Champion/ Well, you can always (mumbled). I'm just, I won't get mad at you. Hayek/ Can you put up a million? This represents only a reasonably accurate transcription of the lowa (:ity c:rty ~;ouncu special work session meeting of March 4, 2009. March 4, 2009 Ciry Council O'Malley/ Sure. Bailey/ Starting in 11. Right? Hayek/ Yeah, do...be realistic about 2010. Bailey/ Yeah, I think (several talking) (laughter) O'Malley/ The thing is, um... Page 31 Lombardo/ And I have to say, I appreciate Kevin's and his staffs ability to pull this together quickly. I mean, we could build a more sophisticated model where, you know, you're controlling the variables up top, but it...it just takes time, and we haven't had that time. (several commenting) (mumbled) O'Malley/ Can everybody see the changes? Correia/ Is the fiscal year 12 issue with the, is because that's where there's that extra pay period or... O'Malley/ That's that one extra payday that happens once every eleven years. (several talking) Lombardo/ What did you reduce out of there, Kevin? O'Malley/ I took a million dollars out of each year, starting in 11. Lombardo/ How did we get to a surplus of 900,000 on 2013? Something's off. O'Malley/ You've got more revenue than you have expenditures, that's why. Lombardo/ Something changed (mumbled) O'Malley/ We're showing (several talking) Lombardo/ ...pixie dust did we just do, we just showed a, um, I mean we're showing a deficit of, um (several talking) 2013...oh, in 2013 we show a deficit of a million dollars on the spreadsheet that you handed out, so in reducing it, your expenditures a million, how do you now come up with... O'Malley/ Thirteen, yeah, so you should have a... Bailey/ Kevin, remind me of the lag of the...of assessments and, so fiscal year 11 revenues reflect what year assessments? 09? O'Malley/ Yes. This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 32 Bailey/ Okay, it's a two year lag. O'Malley/ These others already have (mumbled) Wilburn/ Well, 750,000 puts some tough choices in front, and staff is still aware of looking for, uh, where can we get revenue, um.. . Bailey/ I think 750,000 is going to be hard enough. Hayek/ I would rather be pleasantly surprised, and plan for a little worse scenario. I would be more comfortable with a million, starting in 2011. Wilburn/ Well, the other thing I was going to say is, I mean, um, we're...going to be revisiting this each, we're going to be doing this exercise the next couple three years. (several talking) Wright/ Strangely enough, Matt, I agree with you on that. Bailey/ Me too! Wright/ I'd shoot for a million. Correia/ Hoping to be pleasantly surprised. Bailey/ Did you want to weigh in? Champion/ A million? Bailey/ Hard target to hit. Champion/ I say go for it. Bailey/ Okay. There you go. Lombardo/ Um, we're going to need some more, uh, time, uh, towards the end of this month or early April, um, probably at least two, uh, I'll work with Marian, but to help facilitate a process to get the...the criteria and the weighting done, um, and I think it probably needs to be done in a half-day, plus or minus, session, um, not a lot of...not a lot of, um, you know, overview kind of let's get pretty down and dirty. We know what we're there to do, and we'll just target an exercise to really get through the process, as opposed to a lot of the...the front-end kind of stuff that you'd often do in those types of sessions. Unless that's what...if you want some icebreakers and things, um, but (several talking) Wilburn/ ...calendar dates to Marian. So... Bailey/ Yes. This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 33 Karr/ I've got a number of'em, I guess, the other issue is the flexibility, because right now there...with the exception of the 30th and the 31 st, I don't have seven of you here. For any of it. Bailey/ ...scheduled some stuff (mumbled) Karr/ For any day or evening, except the 30th or 31st. Correia/ Of March? Karr/ Correct. If it's this month. Correia/ Oh, this month. Bailey/ Well, are we talking about dates now? Hayek/ I don't have my calendar. Karr/ No, just be sure to have your calendars. I'm just saying, and also let me know about flexibility. Lombardo/ If it goes (mumbled) I don't think is going to (mumbled) lot of work to do, internally, so I'm...we're going to be...with what we need to do behind the scenes to get prepared (mumbled) um, come April we'll need to have this summed up and able to (mumbled) Bailey/ Do you have all you need...everything you need from us? Champion/ I just have one more question. Lombardo/ A lot. I don't know if it's everything. Champion/ Did we settle on a 25% reserve fund? Is that what we settled on? (several commenting) 25%? Lombardo/ Uh, you said 20...22 is the...22 to 25 is the range you were hitting. Champion/ I wanted 25. Ross wanted 25. Bailey/ I think we said we needed to change our policy that the basement is...it's currently 15. We need to change that basement to 20, and...the statement is optimally 25. I don't remember how the policy... O'Malley/ The policy is currently, is 30% optimum, and no lower than 15%. This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 34 Bailey/ Right, and I think we need to restate that policy as optimal is 25 and no lower than 20% is what I heard tonight. Hayek/ Is the 15 under no circumstance less than 15? Can a...is that what the policy is? (several talking) Is the...the 15 to 30 policy that we have in place right now, is that no lower than 15, no matter what? O'Malley/ No, cause it...that's a goal. That's a...city goal (several talking) Lombardo/ The challenge is with the policy there is, there are no triggers. There's nothing that says if you get at...at 20% here is the things you're going to do to keep it from going...so it is an expression of what you think is fiscal health for the city, but there's nothing in it that causes us to rise...you know, or to put anything into action, you know. Hayek/ I just don't know that it makes sense...if we say 25 is...is our optimal number, why have 20 on the policy. If you dip below 25, then it should be our goal to get back up, and we should only... Correia/ I think the idea is...I think the idea of having the range is because of situations where you're going to go under, and so part of the...triple-A bond rating is that you're (several talking) policies. I don't think we would ever want to say 25, and that's it, just because there's going to be years we're going to go lower. We don't want the bond people to be like... O'Malley/ The policy also reads that if it goes over 30%, then we reduce the taxes. So there's a trigger, so the question is, do you want a narrow range of 20 to 25%, or do you want a range 10 basis points or 10 percentage points, or do you want 15 percentage points? Wilburn/ I...I agree with Amy. There's a...part of it's an indicator, I mean, it's a goal for us. Part of it's, uh, an indicator to, um, you know, the, you know, Moody's and stuff like that, and there's I think, uh, you know, I mean, staff will as different things happen will give us a major project that comes through, here's what it does to your, and then the other piece is, uh, if something does come up of a major initiative and we have a matter of choice, if there's a range there -well, like we did with the Library then, you know, it gives some room to explain to the public and assure, both to the public and to the folks who give us the credit rating, essentially. Hayek/ Is it...anything above 30 tax relief, no lower than 20, optimally 25? Is that the right... Correia/ And maybe there is something that is included that at 25% "X" will happen to...I don't...I can't think of what...you would know what, that we.. . O'Malley/ We'd spend more money? Correia/ We'd save more money? This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 35 O'Malley/ You see, when you set your tax rate, you can't stop the money from coming in. And since (both talking) Correia/ ...too low that there's a trigger for something. Lombardo/ It's heading below a certain...(several talking) O'Malley/ That's what the spreadsheets have been to let you know, here you know, is this a problem? Is 20% a problem, I mean, that was the whole idea tonight is, what...where do you want your fund balance? Correia/ Right. O'Malley/ If when you get down to 15%, you might have to borrow money to make payroll the first quarter. Correia/ Right. Champion/ Yeah, thafd be bad! Hayek/ Well, I'm open to whatever...makes the most sense. I think our goal should be 25%. Correia/ I mean, I feel like we've just...was it last budget, or two budgets ago, where we modified that to 20 to 30. I mean, I don't know that we want to be messing with it too often. I mean, I don't know that that shows very much. Bailey/ Did we modify it to 20 to 30? O'Malley/ We reduced it, we put a ceiling on it. We had a floor. (several talking) We had a floor, but we put a ceiling in it at 30%. Correia/ Oh, okay. The floor was always 20. Bailey/ Not 15? O'Malley/ No, it was 15, the floor. Correia/ Oh, oh, I see. Bailey/ So, I think we want to...raise that floor, is what I heard tonight. Correia/ I think we should keep it, I mean, we only changed it a few years ago, right? Adding the floor... O'Malley/ The policy's fine. I guess today, tonight was what's your goal.. . This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009. March 4, 2009 City Council Page 36 Correia/ We want it about 25. O'Malley/ Optimally. Correia/ When it gets below 25, we want something. I don't know what it is. Bailey/ More money. Correia/ No, but I mean, we want some process that we're going to be paying close attention, right, we want alarms, we want to then be looking at ways to make sure it doesn't go... Wilburn/ I just think we get...we get that anyway. (several commenting) I don't think, I personally don't think it needs to be stated in the policy. Bailey/ Do you have everything you need? Okay. Lombardo/ We have a lot. Bailey/ You guys want to talk about anything else, or would you like to go home? Okay. Let's go home. (several talking) This represents only a reasonably accurate transcription of the Iowa City City Council special work session meeting of March 4, 2009.