HomeMy WebLinkAbout2006-01-17 Transcription
January 17, 2006
City Council Budget Work Session
Page 1
City Council Budget Work Session
6:00 P.M.
January 17, 2006
Council:
UlSG Rep:
Bailey, Champion, Correia, Elliott, O'Donnell, Vanderhoef, Wilburn
Schreiber
Staff: Atkins, Karr, Mansfield, Helling, O'Malley
Tapes:
Karr:
Wilburn:
Atkins:
Wilburn:
Atkins:
Audience:
Atkins:
06-03, SIDE 2; 06-05, BOTH SIDES
Okay.
Now Steve.
Good Evening.
Good Evening.
Budget 07, ready to go?
Hip, hip hurray.
Well we have one enthusiastic voice from the audience. Do we hear a second?
Never hear a second. Okay, as we have done in the past during the course of our
discussion, ifthere's a question asked that we can't answer on the spot we record
it. Any further work you would like to have done. By the way I am a little froggy
so please excuse me. We will do that, and with that, when we balance the budget,
there are three elements some of you old hat please forgive me for a
minute... .expenses, revenue, and time. What we are going to spend our money.
on? How are we go about financing it and what is the period of time? A budget is
an estimate of expense revenue over a period of time. As you know we start rather
early in the budget development process, sometimes in September, October, we
begin putting our estimates together, collecting data, we go to our collective
bargaining agreements, private market contracts we happen to have a variety of
sources. When it comes to determining tax revenues, the State ofIowa is
involved, City Assessor, County Auditor, and the final numbers are not in until
January with the Auditor and Assessor, confirm the Cities tax base. As you know
the tax base is probably the most critical element that we have as that is the
underlying foundation for our property tax system in property tax being the major
This represents only a reasonably accurate transcription of the Iowa City City Council
meeting of January 17,2006.
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City Council Budget Work Session
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January 17, 2006
Wilburn:
Atkins:
source of revenue we have in our general fund. Now, this is somewhat an
elementary explanation and a couple of you are going yea, yea we know all about
that.
Good to hear anyway.
But this year that tax base determination is even more critical because we have
had substantial, and I do mean a substantial, increase in our taxable assessed
values. That is our tax base has grown. It is attributable to two factors, value
increase, that is existing properties, and developed properties have been
reappraised, reassessed and secondly new construction. That is the benefit, I'd like
to believe to grow the tax base policy. After a minute, what I would like for you
to do is focus on the issue of the expense side of our budget. Where are resources
are assigned, where our money is spent, the out go. Because you had an
interesting set of circumstances with the respect to our revenues, that is being
generally healthy and the expense side and some of the requests and interest these
circumstances have come together this year and is something unique, oddly
unique, and somewhat unprecedented in our budget preparations over all the years
I have been here. The program of services for '07, the budget that you are working
with, is substantially the same, that is the expense side, as last year. In that case
means that is the same as the previous year. We've had few changes in our
program of services, expense side. If you look through your budgets you will
notice the number personal in the general fund in particular I believe is up .25,
FDE, over the previous year. Now there is one notable change, but you can set
this aside, is that we do and we have budgeted money, but we have not determined
the expansion of the Transit Services or the changes in Transit Services under the
new small cities grant that we will be receiving, but I want you remember that in
our '06 budget, that's the one that we are working with right now was already at a
reduced level, because of the changes in '04, and 'OS. You'll remember the state
took from the general fund and it took us harsh, but it's sort of what they did. One
million dollars in revenues that we had traditionally received within our general
fund. The State Population Allocation, the personal property replacement, and the
bank franchise. Those are now gone from the budget, and I don't expect them to
return and we have not budgeted as if they will return. During that period of time
we went through, and you will recall we managed our way out of that dilemma,
we did loose 12 position in the general fund, for example our authorized police
strength went from 75 to 71, we cut our expenses on a variety oflevels, we
created some new revenue, that is we drew money from the cable television,
parkland acquisition, we reduced the CVB, although we have reinstated it, those
things occurred in managing our way out of that rather severe reduction in State
Aid. At the same time we lost a number of initiatives. The most high profile one
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meeting of January 17, 2006.
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City Council Budget Work Session
Page 3
is you're all aware of is the 4th Fire Station. lfit haven't been for those reduction
in those aides we had that project not only built but staffed. In other words I want
you to recognize that the '07 budget and the '06, 5 and the 4, are not substantially
different. Now what we have done, is we did factor in the changes that occurred,
for example, collective bargaining agreements, the cost of wages, the inflation
factor, market rate, for example, our fuel costs are up about a third. Health care, I
will note for you in health care that in this budget, we assumed at 13 % increase in
health care, however, we will be recommending and we will get this to ya a little
on exact numbers, Kevin spent some time with our Blue Cross representatives,
we've gone through sort of an experience rating process and we anticipate
somewhat to our good fortune, that we will be able to reduce that 13% to a 6 or
7% increase, that will have a direct affect upon the employee benefit levy. There
are also things that are pending. I suspect you will see an IPERS increase, that is
simply has to be dealt with but the budget is balanced for '07 but in my judgement
we are still behind, we haven't caught up. Noe that sort ofleaves us with a
question on what we want to do with respect with the expense side of the budget,
we allow our departments to submit something we call ESL, which are called
Expanded Service Levels. And it's a process whereby they identify, I would like a
new clerk, or I would like firefighters to open a station, that, we call that expanded
service level. But it is a little unique this time, because a number of departments
are simply requesting to restore where they were prior to the cut by the state. For
example, the Police departments has asked for 4 additional personal, police
officers, that would bring them back to 75, the authorized strength before the
reduction caused by the state. Now other departments have actually requested
expanded services. We want to do more, for example the Library would like to
open 3 hours more per week, and they have made a proposal at $38,000 to do that.
The Police Department would like 2 additional emergency communication
officers. Those things I considered new services, there were not restoration, didn't
get us back, it was an expansion upon where we were. So this presents an
interesting policy dilemma for you from the expense part of your budget, do we
want to get back to where we were, restore what we lost? Do we want to add some
new services, actually new things? Open the Senior Center additional hours?
Open the Library additional hours, or do we want to do a combination? Of add
some, cut some? Keeping, being ever mindful of the fact, that we do expect
pension increase from the State. Now that is the expense side of the budget.
Vanderhoef: Steve? Just refresh me, ofthe 4 police officers that we decreased the force at that
time,
Atkins: Yes.
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City Council Budget Work Session
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Vanderhoef: ... those were retirements so we didn't lay anyone off.
Atkins: That's correct.
Vanderhoef: but as I recall, those were also funded by Cops Grants that ran out. Is that correct?
Atkins: That was a number of years ago Dee, that was about 5 or 6 years ago that we had a
Cops Grant were we hired 6 officers and we then assumed for a number of years
then the State thing occurred.
Vanderhoef: Ok, I couldn't remember.
Atkins: Originally the funding for 6 of our officers came from the Cops Grant that you are
talking about. Ok, anything else? Expense side. Set that aside for a minute.
What I would like to talk to you now are about income, notably the General Fund.
Now historically, as a city, we have lived on our growth. Growth and valuation,
that is the actual property values and new construction, grow the tax base. Our
growth has been good in both areas of residential and commercial and industrial.
During that process, we have preserved the rollback, oops you all remember I try
to one of these every year, there's were we used to be
Champion: ..Rich and well to do.
(laughter)
Atkins:
Champion:
Atkins:
and now we are down to here. It has been a study but dramatic decline. This year
the rollback went from forty seven nine, to forty five nine, or a loss of about 4.2%
of residential values. There is a concern, in my judgment, because of the decline
of 4%, that's troublesome to me because that exceeds inflation. We are losing it
more rapidly than the market in which we are operating. Again that is nothing
new. What we have had, again we are talking revenues, healthy growth, that
would be your second... this is a ten year history of our building permit activity, as
I think you will see as I walk you through a couple ofthese, our tax base is
growing. The problem is getting ahead. Because the reduction in particular when
it comes to residential properties and by the way there is also a rollback on
commercial industrial.
How much?
99.1, it's minor, it's more, does it bode well for the future when they start to
reduce that one as well (can't hear).......
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meeting of January 17, 2006.
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Elliott:
More fear than reality.
Atkins:
No, I think it's pure fear. I don't think. So let's take a look at some of the
construction values and just kind of give you a feel. Under new construction over
the last 7 years and reading down at the bottom, and if you look at the column
1999, you will see a total value. We'll be right with you.
Karr:
We'll be right with you.
Champion:
And they're running the budget
(Laughter)
Bailey: Technology.
O'Donnell: Push the button.
Atkins: I'm trying too......Okay Marian what are you doing wrong?
Bailey: Complex.
Vanderhoef: Battery dead?
Atkins: There it goes. We got it now.
O'Donnell: It worked.
Elliott: It's on the wall.
Atkins: Okay. Now we are cooking. The number that I want you to look at is this one.
You note the preceding year and I can, I have more information, but generally
speaking our building activity prior to 1999 was in the 50 to 60 million dollar
range. It began to take off in the year 1999 and steadily we have showed
ourselves to be in the hundred million dollar range every year. In the last years,
I'm looking at strictly residential right now, if you read over to these numbers,
single family residences in the last 10 years we have built 1481 single families.
But even more dramatic, when you add in duplexes, apartment units and a new
category we have, commercial residential, or the blended, in the last 10 years we
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meeting of January 17, 2006.
City Council Budget Work Session
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January 17, 2006
Elliott:
Atkins:
Elliott:
Atkins:
Bailey:
Elliott:
Atkins:
Elliott:
Atkins:
have built 4465 housing units, that's a lot. Another positive, particularly in the
residential component of our economy is remodeling. It runs rather remarkably
steady in the neighborhood for four million six, six, six, six, six, six, six, all
almost six million dollars. Then in '04 and 'OS, it took a pretty healthy bump up.
Now I think we can attribute that one, our residents are investing in their homes,
two, generally interest rate have been good, but that activity, combined with the
new construction activity in residential it is clear that component of our economy
is doing very well. I also wanted to point out to you, commercial. Because
commercial also has done some interesting things. In '99 it too, five, ten, eight,
now we are up to 12, 14,20,18 almost 19, 26, 26 and 18. Commercial activity
for remodeling, so businesses in our community are also investing heavily. What
I want you to note is apartment buildings. In 2000, you can see the numbers 260,
310, 400, almost 500, 200, this year 140. From what I have been able to gather in
talking with the local real estate folks, this is a reasonably typical pattern, where
you will see growth for a number of years, very high growth, and then it settles
down. I think that is what we are seeing at the end of this fiscal year. Or the end
of the 'OS calendar year. That things are beginning to settle down, the market has
become saturated with the multiple family units.
Which line is that Steve?
Near the bottom Bob. No up above.
Is this mixed commercial residential?
No, just above it.
One up.
Oh, I see it.
Multiple?
Yes.
So that part of our ability to determine property taxes looks very favorable. But I
am also concerned that I think it's going to begin to level off. And you will see
that in our building permit activity and we will have to make some judgments on
that, but clearly, I do get a kick out of folks saying there is nothing going on in
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meeting of January 17, 2006.
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City Council Budget Work Session
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town, well, we got a lot of activity going on.
Elliott: Not to be negative, but how much are you concerned with the total value over the
past 3 years, it's dropped from 119 to
Atkins: What are we looking at Bob?
O'Donnell: Bottom line, Steve.
Elliott: Total value, bottom.
Atkins: Yea.
Elliott: Is that more of what you were referring to with the....
Atkins: The way I read this, interesting issues, 112, 100, 123, 110, 170, 120, 112, that
glitch no, because I go up here and I have almost 19 million there which had been
running at about 12, so it is for a two year period, we're doing ok. And I also
think it could be still representative ofthe private market going out and
borrowing money. Money is getting a little more expensive, that's going to change
the attitude offolks. It's good Bob, I agree, to flag it, I don't see it as a
dramatic..... our total number of building permits runs very consistent. At about
850 a year. Now one other important one and I don't have a chart to show you
this, single families, that's where you hear a lot about that, our single family
activity has run very consistent over the years. You have 1400 units in ten years,
that is an average of 148 units per year, but something I think that is important
that tells me that the market is healthy. We subdivide land, that is new sub-
divisions, platted, cut it up in lots, sell em for development and virtually the same
rate they are being absorbed. During the course ofthe year, I gave a talk to the
Rotary about a year ago and calculated this, as you approve plats during the course
of the year, about 150-160 a year, a 140 of them are getting consumed, that
doesn't mean there aren't more on the market over some time, but the new activity
is keeping pace and folks are consuming that land. I think that is a good sign as
well that we have a good single family housing market. Now the question I think
we have to answer, can we sustain this growth? I would like to take a couple
minutes to work on the sustaining question, that is, can we actually do this?
Lights Marian. There really isn't much left for the State to take away from us.
O'Donnell: Well put.
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meeting of January 17, 2006.
City Council Budget Work Session
January 17, 2006
Atkins:
Elliott:
Atkins:
Elliott:
Atkins:
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We have lost virtually all our State Aide, there has been some discussion about a
property tax limitation, a freeze. That can be done, we have seen that done. The
State apparently sees fit that gambling is a satisfactory way to satisfy, I'm soap
boxing for a minute, local governments but.... Can we, and I want you to just
think about this when we go to some ofthese other numbers, can we continue to
be assured that that level of growth and there by the income generated will
continue into the odd years. I'm personally convince or getting convinced that I'm
not so sure we can guarantee that. Want you take a look at your next chart.
Steve are you saying that in fill development is not beneficial for conserving land
but it's beneficial for our expenditures
Absolutely.
Because if we expand outward we have to spend money on bus routes and sewer
and water?
Absolutely, Bob no doubt. Now reading this chart, will give you a feel what I told
you about that fiscal year, well here's our growth pattern. Now up and down, up
and down, don't get too excited about that, look at these numbers, and this is a
change from the prior year. 8,2,8,3,12,2,8,3 and then 18. 18 we will deal with
separately. We must do a revaluation at least every 2 years. That's why that
happens. A good bit of these 2's and 3's are overwhelmingly new construction,
but every other year property values must be reassessed. We're in a reassessment
year. I will explain that here in a minute. If you average this growth, it's about 7%
a year, it was a little higher than I thought it would be, now remember no
rollbacks applied, no nothing, just 7% growth in the value of our properties. We
have a dramatic increase in '07. Of that 18%,16% of that is in the value of
existing property. New construction is about 2, which is what it usually runs
about. It is an important number, it averages about 7, and we have a significant
spike in our budget year '07. To give you an even a little bit better feel, ifI took
this out and didn't factor it in, growth rate of 5% a year. So it skews it a little bit.
That's our residential property growth. Revaluation and new construction.
Remember these numbers for a minute, you are going to get another chart on this.
Every other year....no, I don't mean memorize them. I want you to note that
pattern, because I want you to look at the rollback pattern as well. And ljust
happen to remember that is 8.5% growth on the previous chart, rollback down 7,
takes away that much of it. Minor adjustment of I think 2.5, rollback actually
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improved. On average, the rollback declines at a rate of almost 3% a year. And it
declines at almost a virtually at an identical pattern to our residential growth, we
give the state a hard time but they had it figured out, because we virtually never,
you can't get ahead with that scheme. The next chart I think shows that even
more so. And this is actual values compared with the rollback, if you remember it
grew, our residential grew at 8.5, rollback down, net and if you look at these
numbers, but unfortunately here, it's starting to get worse, and that is some of our
more prosperous years. So my concern for the future and our ability to generate
income to finance the services, I think you can understand the difficulties that we
have. It seems to me that when you have a growth rate in property values, on
average of about 5%, we don't hear much, I don't think you hear, I mean people
expect that the value of my property is going to go up a tad bit. Never the
revaluation, that we had, Vanguard, we completely redid everything, that was that
year. 12% increase in value. Look what the rollback did, I could never understand
why we didn't have more complaining about property values on Board of Review,
and I now know why cause the rollback took away most of that value growth. But
now we are down to this year and we've got an 18% increase, and a rollback of 4,
we are looking at some lot heftier values in property. A lot heftier values times
the tax rate means a lot higher taxes, ok?
Elliot: How prevalent is this across the state Steve? Am I correct in assuming that in the
Des Moines, Ames area and the Iowa City, Cedar Rapids area those property
value increases are.....
Atkins: I can't tell you exactly Bob,
Elliott: Elsewhere not.
Atkins: But I do recall a newspaper article, I believe it was the Gazette the other day,
where Cedar Rapids was complaining about the fact that their values were not
growing, ifI read that correctly. Ours is dramatic, we now also have a lot of
houses on the market as well, excuse me Dee.
Vanderhoef: I heard an example today at the State House, Clarinda Mayor called because they
lost 1.2 million on there evaluation with the 2% drop and in the rollback, which
Atkins: Kills the little town.
Vanderhoef: Kills the little town.
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City Council Budget Work Session
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Champion: What do they do?
Atkins: What do we do.
Champion: What do they do?
Atkins: They do a lot of cutting, they have to because they have no choice.
Elliott: That's Iowa City and you're thinking if we feel badly, what are the rest of the
county
Vanderhoef: That's it with over 99 counties...
Atkins: We haven't been able to check some of the other cities and hopefully, yeah, Kevin
O'Malley: Bob, I do have the number for Cedar Rapids, and they went up 6.9% and if you
take the 4% rollback they only went up 2%. But most ofthe state went negative
for us to go that high
Elliott: Yea.
Vanderhoef: Do we have a dollar amount of the 2%? How many dollars did we loose in
valuation?
O'Malley: We can calculate that.
Atkins: We can calculate that, will you make a note ofthat please? Yes, go ahead Deb.
Mansfield: The other thing to note is that you have the state law that says that overall
statewide you can only go up 4%.
Atkins: We're the biggest piece of the 4%, whether that is a blessing or we'll talk about
that in a minute, cause I need to show you the consequences of this.
Wilburn: That's because no one category, residential, commercial, ag can go out 4%?
Atkins: I have a chart on commercial. Commercial is up about 10%, our commercial
values are going up just as well as our.... residential dramatically, but the
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City Council Budget Work Session
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commercial values are also up approaching 10%.
Champion: Steve how does that affect us the citizens when you say that the average in the
state can't be more than 4%....(can't hear)
Atkins: What the state does is take all the residential property in the state, lump it all
together, add it up and says it can't go up more than 4%, in aggregate right?
O'Malley: That's correct.
Atkins: So then you have that number so, we're doing real well, somebody else is not, but
they allow a 4% growth.
Champion: What happens ifit is more than 4%?
Atkins: You can't be.
Bailey: That is why we had the rollback.
Atkins: Then they roll it back. That's where the term came from.
Champion: Finally that connects. The light just went on.
Atkins: I'm sorry.
Champion: That's where they came up with that. Ok, I understand.
Bailey: Squish it down.
Atkins: It squishes it.
Champion: After all these years.
Bailey: It's a steel plate on growth.
Schreiber: They are just trying to keep it at the level of inflation basically, is that where the
4% comes from?
Atkins: You know I'm not real sure where the 4% comes from Jeremy, I suspect that at
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the time back in the '70's when this law was put together, you know like we use
3% on a regular basis for inflation, I suspect that is was around 4, back into maybe
even the '60's you might even say 5, but that was the number at the time, it's like
our levy limits, $8.10, you know where did that come from? Well it has just been
there for years and nobody will change it. But it is an attempt to put a lid on
property taxes. That's the states desire. Ok, now that you know the property tax
situation is what it is.
Bailey: We know that we have have for all the growth in the state.
Atkins: Let me do a little summary of the general fund and then I am going to try and
translate all this into what it means for the home owner. But this is also important
to that sustain issue. I can't see my notes. Hold off on any further property tax for
a minute, a couple things, building permits, we have projected that it is going to
run about the level it has been running. I'm a little nervous in that projection.
Yea, and... We've got 7 years of history of good solid growth in building permit
activity. If that will have an affect upon our opinion about our reserves, but for the
time being, we have left that to continue growing, not growing, at about the same
level. Intergovernmental revenue goes from 500, I can't even read that....
Bailey: 789
Atkins: Thank you, is that my eyes or is it blurred?
Bailey: It's blurred.
Atkins: Thank you.
Wilburn: Thanks good.
Elliott: Good.
Bailey: Much better.
Atkins: Okay. Three of you said good, three of you said bad. (laughter)
Vanderhoef: I don't even try.
Atkins: That's why we hand that out. $300,000 new transit money, we have not given you
This represents only a reasonably accurate transcription of the Iowa City City Council
meeting of January 17, 2006.
January 17, 2006
Elliott:
Wilburn:
Atkins:
Elliott:
Atkins:
Champion:
Atkins:
City Council Budget Work Session
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the answers to that yet, that's why that's up. This is not named well, but that
represents $200,000 from our health insurance reserve. Got it? Interest income.
We had a really good year, we are assuming interest rates are going to stay up, the
important thing is that is a $300,000 swing in the general fund budget. As you
think about reserve position, keep that in mind. $310,000 in parking, that's the
money from Court St. paid into the general fund to finance transit improvements
which we will deal with later. Sale of assets, you notice how that fluctuates, 475,
300, 100,400, that is the repayment schedule from the owner of the Peninsula
property. Paying us back, that will go away next year.
Which line is that?
Sale of assets.
See where it says sale of assets Bob?
Okay, yes, gottcha.
That is the Peninsula. Bottom line, total receipts, 47 2, from the expense side, the
most notable change is the contingency account, at 465, our policy had been 1 %
of our expenditures this is the first time in a lot of years we've been able to do
that, but that does put an additional $100,000 expense item, we normally budget
around 350 for that, so that is up, but it also meets your policy. Bottom line, 467
on expenditures in the general fund, it's about $530,000 to the good. Our reserve
position we start in '05, sixteen probably sixteen one, we have some minor
fluctuations but by our projection year '09, we are back at that level, it is a
percentage of the total that's down a bit but we're trying to make that number run
reasonably consistent. Now the question we have to ask ourselves, $300,000 sale
of assets, $300,000 in interest income, $300,000 five year commitment on transit,
it's a million dollars worth of what I believe is soft money in the general fund.
Adding to concerns about property tax, the general fund is clearly healthy, but,
and that's a large but. Okay, hopefully I've laid out for you on the general fund,
what it looks like, let's try to translate it into something that we can take home
with us.
What are intra-city charges?
Which one is it?
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Schreiber: It is the one that runs about 1.6
Atkins: Ok, what we do, is that we charge other funds,
Champion: Oh, right.
Atkins: Let's take a look at this one real carefully. We normally put in the budgeted chart
of what are your taxes per 100,000 dollars and you take that whatever the value of
your house is and come up with a number and it is very accurate. In our current
budget, the budget we're in now, $100,000 value, that's our city tax rate, it was
rolled back by that number, that is the taxable value, that's the city tax revenue.
With me? '07, keeping with what we normally have done, we would add 100,00
and we take 100,000 dollars, our city tax rate as in this proposed budget, now
remember that number is going to go down a tad bit, it will be a lot closer to this
one when we settle that health insurance. This rollback is a little greater, tax
revenue looks like it goes down and it does go down per 100,000. But here's our
problem or here's our dilemma. We are looking at average increases in residential
property approaching 16%. So if we are going to realistically assess the impact of
the tax rate I added 16%. Tax rate, rollback, taxable value, you get that number.
That is a $100 increase.
Champion: How many $100,000 houses do we have in town?
Atkins: That's only $100,000 yes. Well take this number and if you have a $300,000 take
it times, the housing market right now, from my conversations with Realtors are
loaded with those three to four's, lots of em out there, well, that 100 is 300 dollars
on that house. And this is just for City purposes.
Schreiber: I have a dumb question but
Atkins: They're not dumb
Bailey: Not such thing. We're in the budget, no such thing.
Schreiber: I'm just mentally doing math and I don't know if I am multiplying wrong numbers
here, where did the city tax revenue number come from?
Atkins: Right here, you take that number times that number and you get that number.
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Schreiber: Aren't you missing a zero on that bottom number then?
Atkins: What now?
Schreiber: If! do my math right, isn't 17% of50,000 or 47,000 closer to 8,000?
Atkins: Oh no, no, no. 17 dollars per each 1,000 dollars
Schreiber: Oh, Ok, I was just doing it as a percentage times the....Okay never mind.
Atkins: We wouldn't tell anybody. It's per thousand dollars, I'm sorry Jeremy your not
familiar with all that. It's per thousand dollars oftaxable assessed value.
Schreiber: Now I understand, thank you.
Atkins: So, if this budget adopted it today, that's what we are looking at per 1,000 dollars.
It was our judgment that was pretty hefty.
Vanderhoef: The amended one?
Atkins: The amended one yes. So, can we sustain the level of revenue? We have a
number of soft revenues. We have sort of a dilemma that we really can't afford to
do, this is going to sound crazy, a number of new services but my taxes are going
up, but yet we are reducing the tax rates. That's where you get, that's how the
Iowa property tax system works folks. You push it here, it pops out over there.
The difficulty certainly we have with our citizens, you know how hard it is to
understand these things, trying to explain that.
Elliott: All they know is it is costing them a lot more money.
Atkins: Costs ya more money
Bailey: And there are not seeing any increase in services.
Atkins: Yeah, that's the real bottom line.
Bailey: They are not buying anything more.
Atkins: So can it be sustained? I have a lot of questions about it. Here is a quick
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City Council Budget Work Session
Page 16
summary of the budget' 07, these things will get talked about at some time. The
level of property tax in the general fund, the number looks good. But measure it
against what the home owner see, or has to see. Our contingency meets the 1 %
policy. That is $100,000 on the expense side that we had not had in the past.
Revenues, can they be sustained? There are those that are clearly risky, we have
identified those in a general term. The general fund, as it now stands is 500,000 to
the good. You have a policy on service, is it going to be expansion, is it going to
restoration, it is going to be as is, of course a little bit of everything. I'm sorry.
Question we posed ourselves, can we justify the emergency levy? If we are
$500,000 to the good, under the law and the way it is intended, if you read it
literally, we can't justify that 27 cents which would also reduce the tax rate
accordingly. We have in the budget a water rate reduction of 5%, sewer rate
increase of 8, I will explain those in detail to you, refuse collection recycling 50
cents a month. All of these combined, the average user, works out to just a little
over a dollar a month on cost. Transit you have to await, parking rates we have
proposed increases, the airport has a subsidy in this budget of$120,000, ifWal-
Mart goes through, it would be $80,000, it would be reduced by 40,000 dollars.
We don't have, that issue is still pending. Senior Center and Library additional
hours and of course capital projects will do for another evening. How does that fit
your fancy? We have a budget
Wilburn:
I'm sorry, you said between water/sewer and the recycling it will be about a dollar
increase?
Atkins:
A dollar and some change, right.
Wilburn:
Okay.
Atkins:
All three of them together.
Elliott:
It will be a dollar increase?
Atkins:
Increase.
(Tape 06-05 side 1)
Atkins:
We'll come to this The financial foundation for the general fund and cities
finances, is very sound, we have flexibility, we have some soft revenues, if we
were to loose them on the short term, we have a strong reserve position which
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would help make up the difference. If you want any major commitments, long
term, that is another question, it is as if the state forces us to live from year to year
even though we do the three year plan. All of our numbers, with respect to our
property tax base, other than those that are applied by the state are good,
residential growth is good, industrial growth is good, it's just trying to get ahead.
It's an unprecedented set of circumstances, it goes up, it goes down virtually at the
same time.
Vanderhoef: And what might happen at the State Legislature that can change this on a dime
every year.
Atkins: Yep. Correct. We've gone over these assessed valuation numbers time and time
and it's their property value in our city is up, way up and there are many
communities that would kill to have that going on on a regular basis. But there is
a dilemma that it gets created, particularly when it spikes like that in one year, had
it flattened it out, we could have done some different planning.
Champion: I know you probably help out many other things we're going to talk about ..........
Atkins: No I don't.
Champion: How do you, it is acceptable to raise peoples property taxes that much in one
year? I have a real problems with that.
Atkins: That is why I gave you the chart, cause I assumed there would be a couple ofya at
the very least that would say, not that big of a hit.
Bailey: Right.
Atkins: Our history, if you remember, 5% a year, four point something and I honestly
believe that folks don't complain when they see that number a little bit each year.
But I remember the Vanguard study and we heard all people were spiking 12,
15%, but then when it came time to actually levy the tax, the rollback wiped most
of it out and we were back down to 3 Y2, 4% growth. Again this is somewhat
unprecedented.
Vanderhoef: Well personally I am not ready to raise taxes to that extent.
O'Donnell: I don't think anybody is but....
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Atkins: I sort of figured that, and I wanted you to
Elliott: You are going to get into the cash balance a little later?
Atkins: We can talk a little more about that yeah. I would rather you ask me questions if
that's one of them.....
Vanderhoef: Do we have any scenario that would look at this over the three years, of adjusting
dropping it more in this first year til we see ifthere is a pattern, there is something
else that is going on here that we haven't seen yet at this point?
Atkins: We can do a number of things. You can use some of your reserves to, I mean you
can spend them down a little bit, off set the tax if you like, looking for that trend.
Anybody looking at the numbers that I looked at, I mean over the last 10 years are
all very favorable, and we get that spike this particular year, and it makes it very
hard, not from a policy but from a management perspective, cause you have
operating departments saying, we've got the money, well we do today, and I can't
promise you we will have that tomorrow. But the answer is yeah Dee, we could
work, we could re-work that, you know once I understood exactly what you
wanted out ofthe deal, cause right now remember the budget you are looking at,
doesn't have a whole lot of changes in it. You have some, you have everything
being equal. Is the contingency overstated, no it meets your policy, is it more than
it has been over the last number of years? The answer is yes. Is that a $100,000 to
the good from the expense side? Could be, consider that, assuming the Wal-Mart
sale is going to go through, cause if the council were to vote that down, then the
$120,000 subsidy which is in the budget would have to stay, if we know the Wal-
Mart deal is going to go through, there is another $40,000. But that budget is over
stated. And then just our bottom line taking the tax rate times the tax base and our
expense side shows we are $500,000 to the good. But I have trouble proposing an
emergency levy to you when my income is that good. Even though some of it
may be soft, that itself is a reduction in the tax, the tax rate.
Vanderhoef: The emergency levy can be adjusted annually.
Atkins: Yes, oh yeah.
Vanderhoef: Council vote so if we chose not to.
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City Council Budget Work Session
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Atkins: Take it out this year, put it in next. Kevin I have always understood you are very
flexible with that
O'Malley: Correct.
Atkins: It is intended be for those towns that are really hanging out there. We have some
tough years, but we were able to use that levy I think productively in our operating
funds.
Vanderhoef: So speaking off the top of my head, I'm thinking sometime down the road we may
well need to go back into an emergency levy situation and if this is the year to
equalize it out and drop the levy and use the assessments that we have that gives
us a year in here
Atkins: Yes, it does.
Vanderhoef: to watch a trend, knowing full well we can hop back into the levy if we need too.
Bailey: Right.
Atkins: Unless the state were to change the law, it is available to you. I would be real
surprised to see them take that away.
Vanderhoef: But that right there could be the soft money, you said the transit, the Peninsula,
and the third one was?
Atkins: Transit, it is a five year, 300,000 a year. The sale of property, the Peninsula is
$300,000 a year, interest income is another $300,000 a year.
Vanderhoef: Interest income, that is the one I didn't get written down, and then I couldn't think
of it.
Atkins: Building permit activity is up, has remained up. But those three right there are
almost a million dollars. So we want to be cautious with them but the indications
are most of them should be around, we think.
Champion: I have a hard time believing that building permits are even going to stay at that
level.
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City Council Budget Work Session
Page 20
Atkins: So do we Connie.
Champion: It has to drop, it has too.
Atkins: Dramatic, it's a billion dollars over the last 10 years, when you think about it, in
the last 10 years we have averaged, if you want to take a 10 year average, 100
million dollars a year in new construction activity.
Champion: When I see all the vacancies and how the whole county has been billing like
crazy, it's not possible to continue.
Wilburn: At some point it's gonna slow down.
Atkins: I think for sure the apartments will, there isn't any doubt apartments will.
Vanderhoef: Yea.
Atkins: Yea, because much of the apartment activity is all income, you just kind of walk
out the front door and see what's going on. And that's something like 2400 units
of apartments in the last 10 years. That's a lot of units. Student body certainly
isn't growing at that rate.
Vanderhoef: The occupancy is one of the things that I understand is changing more and more
are choosing for a single residence, one per residence rather than 3 or 4 per
residence. So that may be what we have seen that has filled a lot of these.
Atkins: I have always believed our landlord tenant rental industry, this is a pretty savvy
bunch of people who know what they are doing and they are only going to build to
a certain point where they are going to say "time out, I am getting to high of
vacancies" or whatever the circumstances are. And when we drop from 200 to
140, that in it's self is not huge, that I think is a clue, I will be curious to see how
we end this year. Our single family seems to just chug along and we are okay
with that and I don' think that's going to change dramatically.
Vanderhoef: Are there any statistics that tie together ah new job creation with the housing
because what I see in our corridor activity is the increase in the number of jobs
Atkins: Yea.
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City Council Budget Work Session
Page 21
Vanderhoef: And the industry that is coming here with potential for growth.
Atkins: I suspect it could be done, I didn't bother to do it simply because I didn't know
really know what I was going to gain a whole lot, an interesting measure of the
prosperity of the corridor which I think is good. But I was just as surprised from
the Cedar Rapids why their numbers weren't up.
Bailey: That's very curious.
Atkins: You know we get thought of being pricey, but I just, that's just a dramatic
difference.
Champion: I also think in the long run, some things that are happening are going to help the
town but affect our budget and that is the new zoning law which only allows 3
unrelated people, the fact that there is over abundance of apartments, that may free
up some of our older neighborhoods back to single family.
Atkins: Might.
Champion: Of course that is going decrease revenue in the long run but I think (can't hear)
have been affected by a lot of different things that are going to be going on and I
don't think we are going to see this kind of sustained growth unless we can bring
in more commercial.
Atkins: Interestingly enough if you looked at that building permit activity on commercial,
it was 1999 that it took off and I am surprised at that because you know what
happened in 1998? Coral Ridge opened. So there was all kinds of moving
around, Coral Ridge opens in '98 and the next year our building permits, off they
go. You would have figured the opposite would have occurred.
Champion: Why would something for more commercial that provided a sustainable job, not
retail.
Atkins: Yeah and I'm not measuring, that's right Connie, I'm not measuring that
Vanderhoef: But that's when the commercial remodel took off too though, so that
Atkins: People recognize, there's a new kid in town,
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meeting of January 17, 2006.
City Council Budget Work Session
January 17, 2006
Wilburn:
Atkins:
Wilburn:
(Laughter)
Atkins:
Elliott:
Atkins:
Elliott:
Bailey:
Elliott:
Atkins:
Page 22
Gotta reinvest, yea.
If! want to get competitive, I gonna put money into my business, but those
numbers stayed up too.
When looking at you know the policy questions you kind oflaid out for us
whether we expand, restore or some kind of combination of services and just
thinking about the explanation thoughts about growth and we've grown our tax
base to stay the same.
But we would say, generally not your fault, the consequences of all of this. Thank
you.
When you're swimming up stream you have to swim very hard and very fast to
stay where you are. Steve you know I have talked with you about the general fund
cash balance and our policy is 20%, not under 15%.
Yes,S year average of 20% never less than 15%.
And we've been averaging something like thirty million seven hundred over that,
so, it just seems to me that there are times that you can be, if you put to much
aside, you are being detrimental to yourself. And I think that we need too, for
instance, my calculations indicate that the' 04 actual, the balance over 20%
Page25.
I had like 8 million dollars over 20% and I think if you start going to far on that
you are hurting yourself.
My answer to that is that I had a fault in my character, because I really believe, I
think 20% is okay but 1 prefer larger reserves. We're able to react, we don't have
to do any borrowing, we meet our cash flow needs using our own money, if you
were too, if you wish to spend down that reserve, I would say do some one time
things. 1 wouldn't make any long term commitment on that. 1 wouldn't have
trouble with that. Those people at Radar Credit, we want to make sure we have a
plan, that we were spending it just for the sake of spending it, but they certainly
understand that, they will see if you notice 16 drops to 15, bumps back up, but
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January 17, 2006
City Council Budget Work Session
Page 23
within 4 years we've got it back to approximately the level that
Elliott: I just did some figuring and my
Atkins: You're not wrong, this isn't a matter of right or wrong, it's a matter of policy and
what direction you'd like to go.
Elliott: My figuring and I wouldn't trust my math over this, but from '04 actual, '05
actual, going through proposed and estimate, over that 20% is 8 million, 9 million
and 7 million.
Atkins: That sounds about right Bob
Elliott: And that is in excess of 20% and I am just wondering if we are penny wise pound
foolish, that kind ofthing.
Atkins: I don't think we're that. I get accused oflots if things but never that one.
Vanderhoef: Ok, you mentioned that we never have to go to the short term borrowing
Atkins: Yea, we don't run a line of credit like most businesses do. We don't do that, we
use our own money.
Vanderhoef: So at what percent would we make that shift from short term borrowing to
funding it ourselves.
Atkins: And I don't know the answer to that. We can do some assessing that.
Champion: The other thing too, we loose interest money.
Atkins: Thank you Connie, because that $800,000 in interest income will have to be
reduced if you spend down the reserve.
Champion: And I understand spending it for a one time expenditure, I think that is the value
of having that money, I think if things like a big wind storm or whatever,
Atkins: Yep.
Champion: You have the cash to go in there and take care of it, I am not in favor of spending
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January 17, 2006
City Council Budget Work Session
Page 24
that money for anything that would be long term because that would get eaten up,
we would eat that up very very quickly unless you had something to replace it
with and you wouldn't if start spending it on for instance, fire fighters, you would
eat that up very very quickly.
Atkins: Operations things I would have a concern for it, if you wish to buy something or
invest in something on a one time basis, I am fine with that.
Champion: If Steve, if the amount of building decreases, as the general feeling in the
community that it is going to decrease, would we be able then to cut positions out
of planning & zoning, building inspections, that kind ofthing to, if we saw a big
decrease in those kind of things that those departments take care of?
Atkins: If our building permit activity, if you remember that bottom line, that number ran
very very consistent, ifthose, ifthat activity level dropped let's say to 650
permits, the answer to that would be yes. Where else could you do those things?
Throughout the organization there might be some minor changes but I don't think
it is going to drop that dramatically, I think it is going to drop but I am not in a
position in guessing any more, but yes it could be done.
Bailey: I want to go back to this cash balance because I tend to agree with Bob that it does
run a little high, I see the benefit of having it, but I mean I think we could come up
with some kind of compromise, I think Dee poses an interesting question, at what
point would we have to go to the short term borrowing market, I mean I don't
want to loose to much interest, but I think those reserves run a little high there
certainly well out of the policy that is established. So I think that we should
address that either, change the policy or bring it into compliance or some mix of
both.
Atkins: Yeah, did you change the policy at 35%?
Bailey: No
Atkins: I didn't think so.
(laughter)
Bailey:
Short answer, no.
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City Council Budget Work Session
Page 25
January 17, 2006
Corriea:
Atkins:
Corriea:
Atkins:
Bailey:
Correia:
Atkins:
Correia:
Atkins:
Correia:
Elliott:
Correia:
Atkins:
Correia:
Bailey:
Correia:
J am also interested in that as well. Ijust have a question in terms of the question
of borrowing, the chart underneath the year end cash balance that has that short
fallen receipt, so those amounts would be what we dipped into or used.
Approximately.
Approximately. So we have really needed more than 6 and a half million dollars
That's about right, yea.
At anyone time.
At anyone time so even if we went too
A simple way to look at it, we get paid twice a year, October and March that is
when our big slug of money comes in property tax. But of course during the
course ofthe year, particularly in the summer time, as construction projects, and
we have not sold the capital money or hadn't sold the bonds, we have to pay these
contractors three, four five million dollars at a pop, that is where we use all of it.
We reimburse ourselves when the time comes.
Right, just so I understand, since this is my first time through it.
I understand. NO I don't want to appear to be condescending so
Right, no I know.
He's patient with me so. ... sure with you.
So just checking in on it, short fallen receipts, because we are waiting to get paid,
that money comes out of our cash reserves
Yes.
So we don't have to borrow.
From the short term market.
And we have not have to go in more than about 6 Yo million
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City Council Budget Work Session
January 17,2006
Atkins:
Correia:
Atkins:
Correia:
Atkins:
Elliott:
Atkins:
Correia:
Atkins:
Correia:
O'Malley:
Correia:
Atkins:
Correia:
O'Malley:
Page 26
Yep.
So we have, so if we went down to 20% lets say because that is the policy, what
would, you do the math for this, so what would we need to have in there to meet
our policy which is 20%?
Ifwe had a face value of reserve 16 million and we need 6 y" what do we
actually have in reserve, about 1 0 million dollars.
Right.
Did I get it? Our current reserve position is 16, our short fall is about 6 v" we
have to use our reserves to pay those bills.
What's left?
Remember not only the face value of the reserves but as we pay our bills that
money is taken out of circulation for a while, but that is all part of our figuring out
our investments.
I guess that's not my question, was that my question? Maybe that wasn't what I
meant to ask
Kevin am I?
I guess what I meant to ask if we are over.
Amy, are you saying what is 20% of our actual cost that we need to cover?
No,
Page 25 Kevin
So our balance right now is a percent of expenditures for fiscal year seven
proposes 37%
That is correct.
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City Council Budget Work Session
Page 27
Corriea: Ifwe were to have a balance that is 20%, what would that dollar amount be?
O'Malley: That's what I.. "It would be about 9 million dollars.
Atkins: Nine million dollars, yea, thank you.
Elliott: I think a discussion worth having is what percent we do need to have. I think, by
my figures we had 41 % in actual '04, balance now over 20%, '04 actual, well [
just had it on '04 actual
Champion: Where are you getting '04? Oh here.
Elliott: '04 actual.
Atkins: You mean '05 actual?
Vanderhoef: 'OS?
Elliott: Well [just had it on '04 actual.
Atkins: Look on page 25, are you still working on that page?
Elliott: Ah, I picked it up from last years budget.
Atkins: I'm not looking at last year's budget.
Elliott: [just went back.
Atkins: Bob that sounds about right... .40% [ wouldn't have argued with you on that.
Elliott: [ think we have to be and I tend to be very conservative, so [ would tend to error
on the side of having plenty of money but I think if you put too much aside then
you are hindering that amount of money of which you have to work and with
which you can do good things for the City.
Atkins: If you were to use the reserve for a one time purchase, something that is not going
to cause a recurring expense, it shouldn't be a problem. [fyou were going to use
the reserves and bring down the tax rate because the circumstances, that would be
ok as well, but then it's gone. [fyou buy something with it, you get the asset that
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January 17, 2006
City Council Budget Work Session
Page 28
you are purchasing, if you use it strictly as cash, to bring down the tax rate,
remember, once it's gone, it's gone and it's all I have to say about that.
Bailey: Okay.
Champion: Ifmost of us are in agreement with that tax increase, the proposed tax increase is
not acceptable, why wouldn't we just lower the tax rate for that tax period.
Atkins: That is what I am suggesting you do.
Bailey: Wait a minute, I have a question about what you just said though.
Atkins: Where it says tax revenue, it says 20 million, we'll we are going to take a million
dollars, we are going to reduce that to 19, keep the service level approximately
where it is and substitute it with a million dollars of cash, tax rate comes down.
Bailey: But if you consistently project we have like '07, '08, '09, 17, 17, 17, and let's say
we want to reduce this by a percentage that frees up a million dollars, it would
seem that we would have a million extra dollars to work with.
Atkins: Correct, if you kept the tax rate the way it was.
Bailey: Right.
Atkins: But you could also take the million dollars and say I want to use it for this
purpose.
O'Donnell: How does that reflect on the tax rate?
Atkins: That wouldn't reflect on the tax rate. You would just be taking cash and paying
for something you want to do.
Correia: But if we have the million dollars, we could spend it on....
Atkins: Sure, but I wouldn't recommend you spend it on payroll, because next year you
are going to have to pay the person and where does the money come from?
Bailey: Projected that, that million dollars is available and we just keep, instead of taking
17, we take 16, but across the board 17 has been available.
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City Council Budget Work Session
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Atkins: I would rather...
Bailey: That money wouldn't go away if we are assuming the current tax rate. All the
assumptions that are in book right now, we are assuming we have 17 million
dollars to work with, if we say, we only want to hold 16 million dollars in reserve,
we would have a million dollars to work with.
Atkins: That is correct.
Bailey: And why wouldn't we spend it on a recurring expense?
Schreiber: Then you have 15 million, then you have 14 million, just goes down.
Champion: Next year you are going to have a million dollars less, and the next year, another
million less.
O'Donnell: It goes away.
Atkins: It goes away
Schreiber: Cause if you have an asset, you're replacing the liquid cash asset with the
Atkins: You're doing fine.
Bailey: But we have projected, I mean it looks like we would have it for a period of time
Atkins: Yes, we have projected a level of service
Bailey: Right.
Atkins: That you want to add to that level of service,
Bailey: Right.
Atkins: But we have to get paid for it next year as well as this year.
Champion: So every year we are going to need another million.
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City Council Budget Work Session
January 17,2006
Atkins:
Elliott:
Atkins:
Elliott:
Atkins:
Elliott:
Atkins:
Correia:
Atkins:
Correia:
Atkins:
Correia:
Atkins:
Correia:
Atkins:
Page 30
Keep ratching down.
I have from the '04 actual to the '09 estimate, 41 %,43%,38%,37%,36%, it
seems to me that, what I would like us to do is pick a percentage that we think is
very appropriate, now you think 20%, obviously is too low.
I do, yeah. So you think 30%?
I think 40% is too high,
There you go.
So where in there should we aim for that's fiscally sound and beneficial and you
just pointed out, we have a relatively uncertain future, tax wise, money wise
I am concerned about the expense side from the fact that our revenues, a number
of them are very soft, we are just coming off of a loss of a million dollars from the
State, and we got through that, but I have a million dollars in soft revenue, now I
also may have a million dollars in new expense, I get nervous for you.
I have a question, and this might be a stupid question, does the contingency go
into the this cash?
No, expense item.
Where does it go?
It's an expense side item, the contingency gets spent often during the course of the
year.
On what?
Oh, let's see, you wanted to buy a new computer and we budgeted $300 and it was
$330. It's intended to meet certain emergency needs.
So did we spend all the contingency?
Oh, no, no we have not,
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meeting of January 17, 2006.
City Council Budget Work Session
January 17, 2006
Correia:
Atkins:
O'Malley:
Atkins:
Correia:
Atkins:
Correia:
Atkins:
Correia:
Atkins:
Correia:
Atkins:
Correia:
Atkins:
Wilburn:
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Last year?
No, well we're not done yet, where are we?
A couple years ago we spent a contingency, like one month into it we bought a
house that, $270,000.
Remember the two houses we bought, we took it out ofthat, that wiped it out
Did we sell them? And got the money back?
Oh,yeah, put the money back, but by having the money you have the flexibility to
do those kinds of things. We bought the Peninsula property with a FEMA grant
and our monies and in doing that we pay ourselves. Weare quite good about
disciplining ourselves, if we buy this, we have to pay ourselves back and we do,
we have to replenish those reserves.
So last year, we only did half of that, contingency amount?
Approximately.
And the year before we didn't do it at all
No, when you close your books you, it zeros out.
Okay. So we could, we have the flexibility of that amount if you want?
Yes you do. We have historically had a contingency in the 350 range, policy had
been 1 % because of our financial conditions, I fulfilled that policy, that's why I
made that note that's a 100 thousand on the expense side, that we did not have
before. You could very easily say, I am going to go back to 350, put the 100
thousand on the revenue side and I want to take the 100,000 and buy something,
you can do that.
We could even, this is a recurring expense, so we could even
You just have to be careful of those.
I was just thinking, I will have to give it some more thought to balances,
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percentage of expenditures, but coming from a non-profit I certainly understand
soft money.
Atkins: Yea, I bet you do.
Wilburn: And so if you really make a decision too fund personal on soft money you are
really putting yourself in a position where somewhere in your organization
someone that you are looking at potential lay offs at some point. For example, if
you were to use soft money to fund police officers like which has been done,
Atkins: Yep.
Wilburn: You're are making a decision well, we are bringing those police officers on but
they may have to go at some point. Or you are spreading it out through the
organization.
Atkins: A couple of you may not remember the Cops Grant, once you got the 6 officers
which we took under the Cops Grant, President Clinton, that was his program, you
had to commit to keep them, so they paid for them for a couple years, and our plan
was we'll take the cops money, we'll hire the 6 officers and we did an analysis, I
don't know its buried somewhere in the files somewhere. Dee is nodding her head
because she remembers it. We might have to use the emergency levy to help cover
part of that cost. In other words we had a plan too absorb those, we don't have that
flexibility in this budget other than cash.
Vanderhoef: We also looked at retirements.
Atkins: Yes
Vanderhoef: How many would be retiring that we might not
Atkins: Fill.
Vanderhoef: Rehire.
Atkins: We had a couple of those too.
Elliott: Steve what do you think is an appropriate difference, I am looking at the cash
balance and you think the 20% is not appropriate.
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Atkins: In with soft revenues, with how I have seen the years that I have been here, the
storm of '98, one of the reasons we responded like instantly, we hired this what
was that thing, $1500 an hour grinder, we went out and did it and it worked, now
we were able to get a good bit of that money back from FEMA but we were able
to respond very quickly to emergencies. And that is all part of reserve thinking
too, is that your savings account. Now as far as the number is concerned, I don't
know but I sense you want us to do a report of some kind, I think if we are down
to the 30% range I am not going to get real concerned, but if you start dropping
below that.
Champion: I am not concerned about the amount. My concern is people who are concerned
about the amount, what do you want to do with this money? Because if you are
planning on a recurring expense, I can not support that because that is going to
start eating away at that reserve and it is going to be down to nothing in 5 years
unless we have some incredible boost in taxes. So I think you are going to have to
understand that that money is there but if we start using it, it is not going to be
replaceable and employee not only recurring but they are more expensive every
year. So like Ross says, you have to plan, if that is what you want to do with that
money, but plan on laying people off, when that gets down below an acceptable
level. I think the other thing you have to look at with this reserve money is the
amount of interest that saves taxpayers paying on bond revenue, bond deficit,
bond pay, bond deficit, whatever, it's bonds right?
Atkins: No,
Bailey: Money we save indebt service.
Wilburn: Right.
Atkins: We did not have to borrow. In your business I am assuming you have a line of
credit,
Champion: I never borrow money I'm rich.
(laughter)
Atkins:
Alright, wrong person.
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Bailey: Anybody else around this table.
Vanderhoef: Dee says she knows. She has to buy a whole bunch of book all at once for a line
of credit you need to do that.
Champion: Exactly. And I do the same thing.
Atkins: That's what we avoid having to pay any cost for a line of credit.
Champion: But also because we have a good reserve it makes our debt revenue (can't hear)
Atkins: When we get AAA credit rating, one of the things that they look at is what is your
reserve position and the credit company said do you look how quickly can you
react and have cash on hand and we can do that very quickly.
Champion: That is what I meant to say, thank you.
Atkins: You're welcome.
Champion: But I think it is much more complicated than just knocking it down. Much more
complicated.
Atkins: If you want to spend it down, then I would say on a one time expenses, if you
wish to pull the property tax down
Champion: Right. I'd be willing to do that.
Atkins: You can use cash to do that, if you want to buy something one time I am ok with
that but I would really caution you against a recurring expense.
Elliott: I tend to agree with you on that.
Atkins: If you want to library for 3 more hours and Senior Center, those are not huge
items, but I was trying to give you a budget set, this is the same way as it was, can
you make these small adjustments within this budget such as the library or
something similar? Yeah, you could do that. Nine fire fighters is $600,000 bucks
a year, that is a big hit, 4 police officers, that is over a million dollars between the
two of them, and if! have a million dollars of soft revenue, psst it evaporate the
next year, that make me nervous.
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Champion: Plus to build the fire station, peoples taxes are going to go out of site.
Elliott: I think we are ok with that money are we not?
Atkins: What we would do Connie, the plan had been that our budget, that we had placed
ourselves in the position that we would pay in, over a 3 year period, we were
going to pay for the fire station with cash, we weren't going to have to do any
borrowing, and if we did have to do any borrowing it was going to be a very small
amount, cause we had enough money to staff it, equip it, and build it. (can't hear)
Bailey: What year did we identify the land for that? And the location for that fire station
Atkins: Oh, it's been 3 or 4 years ago,
Bailey: Okay.
Atkins: Easy, when we first started planning Dodge St, so that has been 3 or 4 years ago.
Bailey: Cause I just wonder if it still remains the best location considering our growth to
the east.
Wilburn: Well there's, if! am remembering back on the response time sheet that we got 2
years ago there's a couple 3 spots where future
Atkins: Up off curve by Scott
O'Donnell: Captain Irish.
Elliott: That's tough.
Atkins: That spot is also one that we talked about and it was privately owned and if I
recall the guy was not interested in selling, we didn't want to get into that. This
corner had a lighted intersection, major new street was going to be constructed,
that's why we made the...
Bailey: Ijust think that is something we should keep in mind as we go farther and farther
out to develop it, does it remain the best location because we are growing in a
different pattern I think than we anticipated.
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Elliott: I think you'd have to look not only at the number of structures but the number of
people within those structures and right there at the hwy 1, 1-80 interchange is a
whale of a lot of people during the day.
Bailey: Who also both of those facilities though as we all know have a lot of protocols
regarding their own response too, I mean which residents don't necessarily have.
Vanderhoef: So are you saying that you want station number 1 moved?
Bailey: No, I'm not saying anything, I think it is something that we should keep in mind
because we recently annexed some more land to the east and I see just some
incredible growth out Rochester and I am wondering about, I know we have
connector and but I think it is something we should consider, particularly as we
are farther and farther out from building what will the city look like. We don't
want to be responding to a city that is 3 years ago. We need to be responding to a
city that is 10 years from now when we build.
Elliott: But I would also like to see if we could come to an agreement right now,
according to my figures and actual '04 and '05, we had a balance of, we had 41%
in cash balance, 41 or 43%, to me that's not wisely using the money when there
are needs. What, we're 20, do we need to go as high as 30 but if we go to 30 I
think that we need..
Bailey: Can we run some numbers that talks about interest rates that has a chart with the
percentages
Vanderhoef: Yea, I want that. Where we're at with cash flow.
Atkins: We can work some scenario's. I am fine with that, I have no trouble with that.
Schreiber: With the cash money as far as is it legal to invest it like a fixed income securities,
something like that?
Bailey: We're very limited on our investment interest.
Atkins: No, we are very limited on that. At one time
Vanderhoef: Iowa law.
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Atkins: Yea, Iowa law a great deal of flexibility, Dale will you get me a paper towel since
I just dumped my water on my notes.
Vanderhoef: How about we take a break.
Champion: Does that mean we get to home tonight now?
(Laughter)
Atkins:
Either that or I'm going to be electrocuted. One or the other. Do you want ot take
a five minute break?
Wilburn:
Take a five minute break.
Atkins:
I'll clean up my mess then.
Wilburn:
Get yourself together.
(BREAK)
Atkins: We can all hear anyway.
Vanderhoef: You know I'm trying to keep this away form the microphone at least. She doesn't
have her headphones on yet.
Karr: I know what you are doing and I'm going to wait.
Elliott: I'm guessing.
Bailey: So can we just stick that up there?
Atkins: We are going to talk about reserves, how big they should be, I am going to take it
as a clue you would like that number reduced somewhat, what are the
consequences.
Wilburn: Ifwe could just have a graphic representation of the effect of doing that related to
expenses and receipts.
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Atkins: Do you want me to do some work.
Bailey: Yes, I am not saying that I would necessarily but I think this not less than 15%
also might be too low and we might need to change a policy.
Champion: I would be willing to reduce it to reduce property taxes.
Atkins: That is expense side, right now you want me to do some.
Bailey: Yes
Wilburn: Yes.
Elliott: To me, I don't know how they are but to me, going below X amount puts us in
danger of two or three illustrious situations.
Atkins: I understand your point. The next thing you were talking about was is that's the
case, that will create a pool of cash, what is it you want to do with it. One of the
options
Champion: Ohm right.
Atkins: I heard was to buy down the tax rate. But we also had some peripheral discussion,
well I really, I am interested in seeing this done, the question we had was one time
expense and recurring.
Vanderhoef: I am interested in looking at the possibility of dropping the emergency levy as a
way to use to cut taxes.
Champion: Good type of thing for right now because we can reintroduce it anytime.
Bailey: Yeah.
Atkins: I think once you know this number, let's say we settle on, I am just going to pick
30%, you had 40, I had 20, you had 20 and I had 40, whatever, that will create a
number, then you will have a working number and then you can decide, I want to
use that all to buy down the tax rate, I want to use half of it, but I need to be able
to project the consequences of doing that. These kind of all fit together, once that
number is known.
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Vanderhoef: I do want that number, at what point do we start going to short term bonding.
Atkins: Borrowing.
Correia: How much does the emergency levy bring right now?
Atkins: It is a 27 cent levy and brings in approximately $600,000 a year. For each 10
cents, is that right. on the tax levy is about $200,000, so if you drop to 30 cents
you drop it $600,000, it is a 27 cent levy. And 27 cents is by law.
Vanderhoef: That's max.
Atkins: That's the max, you could do 15.
Karr: Mic on?
Atkins: Yea, I do.
Karr: Hard to hear.
Atkins: Better?
Champion: The other thing I want to ask is that 18% increase.
Atkins: Excuse me a second Connie. 1,2,3,4, 5, Okay go ahead.
Champion: You're projecting for residential, how do we know for sure that is going to
happen?
Atkins: Cause it has been certified by the Assessors, certified by the Auditor and blessed
by the state.
Champion: I don't like those people.
(laughter)
Wilburn:
Don't be a hater Connie.
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Atkins: I can assure you, Kevin and Deb questioned it, massaged it, pushed it, pulled it,
$300 hundred million dollars in new value. I mean it jumped off the paper at us.
Ok, what else?
Schreiber: Maybe you should just let Connie fire whoever she doesn't like. That would save
a lot of money.
Atkins: Okay what else?
Champion: Maybe you could get the Arts fund back up to $100,000 a year?
Atkins: There are amounts of cash that you could identify in the budget, for example we
have already talked contingency, that's up. That contingency, that's 100, if you
buy down the tax rate, that will adjust the revenues, if you did away with this,
other words that will go away, you would be balanced then, approximately. The
airport subsidy is as it was last year, if the Wal-Mart property is sold, then those
monies would be applied to reduce all.
(Side two of tape)
Bailey: Can I ask a question about the, I mean this is a very specific question about the
airport?
Atkins: Sure, I will do my best.
Bailey: The rents have dropped, by about $15,000, it seems like we are making up for that
drop in rent, why did they drop?
Atkins: Any idea Deb?
Bailey: It is on page 105.
Wilburn: But that is not related to, maybe this is something else, there was some
arrangement with the F.RO., but that wasn't related, this is rents for
Bailey: I am assuming this for hanger rental and we haven't reduced the number of
hangers available.
Vanderhoef: Is that when they took the all the rentals out so they could start doing the flooring
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in some of those hangers?
Atkins: They do have to repair some that could be, it could be down temperately, but I
don't know, do you know Deb?
Mansfield: No, I don't know right offhand.
Bailey: Can we just put that on a question, because it seems like that little bit of a jump in
our general fund subsidy is subsidizing the rent reduction?
Elliott: I don't think it's off point to ask, what does the future look like for the airport,
you're talking about it would go from 120 to 80,000 if things work out, how long
before that $80,000 can come down?
Atkins: Well we sell the rest of the land.
Elliott: That would be contingent on the other land sale.
Atkins: Yes, you got aviation commerce, if aviation commerce park north builds out, and
a good piece of commerce park south builds, they should be without a subsidy. It
should go away.
Elliott: Now, I'm not sure I would want without a subsidy but I would certainly like to get
it down from 120 down from 80.
Atkins: They have, as you know they do a lot of their own thing and they have been very
good about keeping us informed,
Elliott: Right, right.
Atkins: And we're going to miss little things like this, simply because they do their own
thing, if we go back and ask them, they'll
Bailey: Oh yea.
O'Donnell: Steve, do you know what the 5% water rate reduction calculates too?
Approximately.
Atkins: Do you know Kev?
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O'Malley: I believe about 450,000 dollars.
Atkins: This would be our third reduction.
Bailey: They wouldn't even notice cause the sewer rates are going up.
O'Donnell: That's it...
Bailey: I'm sorry but I'm just thinking about like a citizen. Thinking like my father.
Atkins: Well, the sewer rate issue, there are two issues here, one is that we want to
refinance, Kevin, why don't you walk through the refinancing so you understand
why we're proposing this.
O'Malley: We have about 70 million dollars in sewer bonds, of those we want to refinance
18 million dollars.
Vanderhoef: I know...
Bailey: Can we just have.. .I'm sorry. I'm having a hard time hearing
Wilburn: Too many conversations going on.
Bailey: No, I'm listening to you.
O'Malley: We have about 18 million we can refinance if we could get a covt<nant, if we
could get our ratio on our covenant up 1.25, unfortunately, we can't issue bonds
unless make 125% revenue over expenditures. We have to have enough to sustain
that and we've been dropping for the last 3 years. And if we go I 10% we have a
conflict with our creditors. We are down to 1.14 so that's been a flag for us that
we have to raise it and if we can raise it I am going to restructure the debt so we
can save some of that 8%. Amounts to about another million dollars over 20
years.
Atkins: Also explain where we are with P & G.
O'Malley: One of our major customers is, has changed their processes
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Bailey: Right.
O'Malley: And we had built our plant to handle those kind of processes and not that frees us
up some capacity but we are down somewhere around 6 to 700,000 in revenue and
see it's creeping up a little bit but that is a significant hit. We have to look for cut
revenue somewhere else.
Wilburn: You mentioned that last year that. I think you mentioned and you said
Atkins: Gave you a heads up last year.
Bailey: But I thought this new project also had potential to increase the capacity use
agam.
O'Malley: That new project we hadn't factored into our calculations.
Atkins: In fact we are meeting with the P & G officials later this week as a matter of fact,
Rick will be doing that and we are trying to find out, they were going to do some
pre-treatment on site, I think they are beginning to become disinammered, they
would just as soon use their space for product
Bailey: Sure.
Atkins: as apposed to, well, this could change, could it go down a tad bit, yeah, I can't
imagine it right now going up, but the big thing to us was that long term financing
that we wanted to resolve,
Bailey: That helps.
Atkins: Because if it isn't P & G, Lear or somebody else could pop up tomorrow and that
thing gets
Vanderhoef: Okay tell me
O'Donnell: Steve, you said the 3 hours in the library, additional hours
Atkins: Yeah, $38,000.
O'Donnell: What is the figuring in the Senior Center?
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Atkins: 33 and it's five to nine, five days a week.
Champion: Wow.
Vanderhoef: Going back to water and sewer, how much of that sewer rate is increase is do to
the fact that water rates went down, because the rate of sewer is predicated on the
use
Atkins: Volume, not the rate, only in volume, right, How much water you use, you pay
for.
Vanderhoef: Right.
Atkins: How much water you use is also measured to calculate your sewer bill, not the
water rate. Volume based. When you pay water rate
Vanderhoef: Water used at the plant is not going to change, it is only the clean up, got it.
Atkins: Water fund is for consumption, water for the sewer fund is for transportation, it
takes bad stuff away, you know what I meant. Ok,
Bailey: Sewage.
Elliott: Bad stuff (laughter)
Vanderhoef: Refuse collection is only for existing services. Not for anything...
Atkins: Nothing really changes, yeah. We are working on some proposals that involve the
furniture project, the salvation barn, restore, we have not hired the recycling
coordinator position yet, we are still trying to figure out exactly how we want to
go after this. It doesn't have a bearing on this because this meets it financially
with the cost of fuel, we haven't really had a dramatic adjustment in this and this
is really over dramatic but
Vanderhoef: This is more inflation than anything else.
Atkins: That's 3% it works out to on the rate.
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Vanderhoef: Okay, so I guess my question is then, there is a potential for it to go up even more
with the new projects that we're working on.
Atkins: Possibly, if we can use some of our landfill, I am using the "ROO word, reserves, we
then have the ability to make some of these purchases through the use of those
monies and depends on how much we are going to pay it back, because you can
change tipping fees, you can change this fee, right now while we run a residential
refuse collection program, as a city, we run a landfill that's for the region. And
always trying to figure out who should be paying for what is part of our little
dilemma. This is 50 cents a month for the next 3 years, 50, 50, 50, that is what is
proj ected in the budget.
Vanderhoef: See, that is just the inflation for the year.
Atkins: Yes, fuel costs alone I can justify that. Cost of diesel went up.
Elliott: Did you say the other day that while that is going to go up and you're going to
make some capital purchases or some major purchases but then after that
Atkins: It should level off.
Elliott: It should level off and go down? Perhaps?
Atkins: It is tough to say now with the costs of fuel, employees are going to cost you 3%
more a year and the cost of fuel if you could predict, because we have burned up a
lot of fuel, we are planning, I think we are doing more experiments, we're are
going to buy another one of those single person,
Elliott: One person pick up.
Atkins: Right, we have not changed our routes in 20 years.
Elliott: The second person is one of the major expenditures.
Atkins: Absolutely.
Bailey: But with growth would we really, I mean, in the future in a growing city
Atkins: Most of our new stuff, like where I live or Windsor Ridge, what's easy to roll the
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thing to the curb, they go right down the street, picking the thing up. If you live on
the north side, forget it, we have to tote it, so it is much more expensive to serve
the people on the north side.
Bailey:
We could take our trash to your office.
(Laughter)
Elliott: Are they worth it? (laughter)
Atkins: Of course they are worth it. Stupid is not stamped on my forehead.
Correia: I have a question and again I don't know again if this is a stupid question, but I
was looking through landfill and I looked at the landfill, which has a lot of
Bailey: What page are you on Amy?
Correia: 106,
Bailey: Thanks.
Atkins: GO ahead Amy I'm listening.
Correia: So there is money that goes in, interest revenues of 315,000 and then transfers
from businesses type, $500,000, but they don't even, they have total receipts of 6
million, but only spent 3 million, so are those, what are those funds and could
those go to recurring?
Vanderhoef: No.
Atkins: It is what we call enterprise fund and it's for the inclusive use for the landfill, you
can change the policy, but most of these transfers out, the expensive stuff, are
going into reserves because we have a 30 year liability on the landfill where we
have to set aside oodles of cash. This is one of our, sort of our bone of contention,
we have with the State, they requires us to have these millions of dollars set aside,
and we've argued that we could use our debt capacity among a number of other
things.
Wilburn: The liability is to close it.
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Atkins: The liability is to close it and then maintain it's closure for 30 years.
Correia: How much do you need......
Atkins: Oh, I imagine by the time our landfill probably has another 15 to 16 years without
to much trouble to the closure, the closure ofa landfill is 15-20 million bucks, it's
a lot of money and then you have to maintain it, it has to becomes like an
inventory of, I don't want to call it an asset, it's just something we have to
maintain.
Vanderhoef: The methane...
Atkins: Yea, you have methane gas, leachate, all of those things, I mean the sewer bill out
at the landfill will go on forever. That's everything. The leachate. Virtually
forever until, if everything in the landfill dries out, then there is no leachate.
Vanderhoef: So let's empty the river so we can dry out the
Atkins: You can get a big tarp and throw over the top of it I guess you're okay.
Elliott: We are still working with the unsettledness, ifthat is a word, of the old landfill,
Atkins: Oh absolutely.
Bailey: Right.
Elliott: Is that (can't hear)
Bailey: And the methane, yea.
Atkins: 40 years, 50 years.We have pictures of that landfill, it was disposed of, you
backed the truck up, you dumped it and you threw a match.
Elliott: Oh yeah, I remember.
Atkins: You don't get to do that anymore. Just to give an idea. When I first arrived here
we built a landfill cell it was about $350,000, what was our last one? One million
six? Same amount of space.
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O'Donnell: Steve, what did we put into the methane cleanup of the transit building down
there?
Atkins: I don't know, I can find out for you.
O'Donnell: No, that's alright.
Elliott: Oh, my question was,
Atkins: A bunch Mike. Mike it was expensive.
O'Donnell: I know it was.
Atkins: Yea, excuse me Bob.
Elliott: Things fly in and out of my mind so fast it's unbelievable. My questions was, on
the trash pickup, would you say you're making the transition wherever feasible to
this one person,
Atkins: Wherever feasible
Elliott: In order so not that they will drop, but to keep from the inflated prices and holding
the line on it.
Atkins: That's part of it,
Elliott: More to hold the line than to decrease
Bailey: Safety.
Atkins: One is employee safety and two, and not necessarily, we always have to think
employee safety cause that is a tough job, and then secondly as you described it.
Many of our neighborhoods will never enjoy the benefit simply because of their
design, but the typical almost suburban Windsor Ridge, Galway, those
neighborhoods can be served with one person.
O'Donnell: Nice flat areas.
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Atkins: Yes. That's part of it yea.
Bailey: Can we put this franchise fee question, this case up here so I don't loose track of
figuring out what implications that has for our city, odd little case.
Elliott: And what's that?
Bailey: There was a case in Polk County about franchise fees.
Champion: We don't have any franchise fees.
Vanderhoef: That was just on cable.
Bailey: And the use of cable franchise fees for general funds right?
Atkins: We take a hundred thousand dollars a year from cable revenues and put in the
general fund. And a franchise fee, is Mid-American, is Des Moines? yeah, cause
Mid-American provided the service and the city of Des Moines was charging a
fee, I mean they passed it along, which is to be expected and the Courts said,
Bailey: But only about that woman.
Atkins: Well, as I understood it,
Bailey: Because it wasn't a class action suit.
Atkins: She was trying to make it a class action suit, I got to believe Regenia that it will
become a class action, how could it not?
Bailey: I don't know, probably will.
O'Donnell: That is a very good question on those Airport rents going down, 15,000, I would
like to know more detail.
Atkins: We will find that out for you, we will, yea.
Bailey: Because we are basicly offsetting. Actually my notes say we're repairing the
parking lot, we are covering the cost of the parking lot.
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Atkins: They have been very good to work with, but they are independent and
O'Donnell: Are we all rented now?
Atkins: I don't know that Mike.
Vanderhoef: Steve, when you are playing with that number of point short term borrowing,
comes into play can you expand that a little bit, looking at what it might be if we
through in the inflationary figure, in other words we might end up having a
reserve at one point and then
Atkins: Ok, help me Dee, I am confused on the inflation, explain that to me.
Vanderhoef: Well if, if we were going to be borrowing, the borrowing to keep us at the same
capabilities, another year because we know our salaries and everything else,
construction expenses, all those things are going to continue at inflation so,
whatever the OPI would go up, would that be a reasonable thing we should be
looking at with the reserve?
Atkins: I think I know how to answer that.
Vanderhoef: I think we would,
Atkins: Okay.
Vanderhoef: But this rate today I am just about fried.
Atkins: My brain is fried too but that's ok, we'll run those numbers for you.
Wilburn: In asking this I am not intending to open up discussion about the capital
improvement program, but now but we talked about possibilities of one time
expense type things
Atkins: Yes,
Wilburn: I was looking at the emergency communication radio system, what you've put in
the CIP is that just a projection working towards the replacement, some level of
replacement but not including
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Atkins: That number was intended to deal with Iowa City Emergency Communication
Wilburn: Only?
Atkins: Only, yes because that number was prepared almost at the same time we were
getting the report.
Wilburn: Okay.
Atkins: And I am still kind of working on it, I think most of you are working through the
report. I think I understand the drift of it. But when I saw, 4 Yz, 6 million bucks,
we swallowed real hard, now, is that the kind ofproject that would be good for
one time? I am not answering it real quick so that means I am not real sure,
because once we build a communications center to that level we have got to
maintain,
Wilburn: Yea, we've got to maintain.
Atkins: So it is going to recur, that doesn't mean we can't, if we had a 28E agreement
with all those other organizations one ofthe things I would recommend is a
depreciation account. Even if it is just setting aside something each year in
anticipation that if the technology changes, thigns like that.
Elliott: I think there's going to be some significant questions after the demonstration, as
to how much of that is going to be a one time cost for and how much might that
be offset by perhaps reduced personal or, there are just going to be a number of
questions on that.
Atkins: Now, those are great. That's exactly what I want.
Vanderhoef: Or increased personnel.
Elliott: Yes.
Atkins: No, when we asked the question, they gave us the answer,
Bailey: Sit down when you read the answer.
Atkins: It is only supposed to cost $1.98 and we are all going to be happy, didn't work
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that way did it?
Vanderhoef: Add a few zero's.
Wilburn: Is that essentially your presentation tonight?
Atkins: Yea.
Wilburn: Are there any, can you walk me through your time line again with budget intent
before we
Atkins: There is a number of them
Wilburn: I think we have had some folks calling about community events and those type of
things.
Atkins: Monday, a council meeting the 23'd it starts at 5:30. I remember that, Monday at
5:30, Tuesday the 24th from 9 to 3 with the library. Wednesday the 25th, in the
morning, capital projects, I have a formal presentation planned for you, all the
staff will be here, they will walk you through each of your capital projects. I'll do
a brief summary on some of our policies but it is a chance for you to say, explain
that trail to me, or that building to me or whatever it is
Elliott: I am embarrassed, I was hunting for my pen when you went through those first 3
dates
Wilburn: Start over is what he is saying.
Karr: Those are in your packet, they have not changed.
Elliott: That's all in the packet, okay.
Atkins: The 25th you'd be here from 8:30 to noon for capital projects and that open
discussion and we have the comm. center proposal from 1 to 3, Monday the 30th,
at 7 o'clock, boards and commissions. We will probably put on that agenda open
discussion as well so,
Wilburn: Boards and Commissions, does that, and I am sorry, I had computer issues earlier,
does that evening include the community events or is that another?
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Karr: Yes, so that evening so once you firm up the schedule that Steve is just going
through the letters will go out tomorrow to all of those funding.
Atkins: Most of them have been called, they have a heads up on the thing but that's the
plan. Then Tuesday the 31 5t from 8:30 to noon is open for budget.
O'Donnell: I have from 9 to 12 on my budget, is that a change?
Atkins: I have 8:30 to noon.
Elliott: Tuesday the 31 5t on our material says 9 to 12.
Atkins: Ok, that's what it will be.
O'Donnell: Don't try to pull that 8:30 stuff.
Bailey: When is the public hearing for the budget?
Karr: The public hearing will be the 28th, You will be setting it on the 13th, you're
setting it February 13th for February 28th.
Bailey: That's what I thought. That just seemed really late. I don't know why.
Champion: I can't find it right now but I know you increased the budget for 3% for
community events.
Atkins: Yes
Champion: And did you decide where that money was going to go?
Atkins: No.
Champion: So we talked about that?
Atkins: Yes.
Bailey: You can talk about everything.
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Champion: I put it in here but I can't remember where I put it.
Karr: You will be getting that information also when you get the, in the next packet
prior to that meeting. We can out that out again.
Champion: Okay.
Karr: Do you want just that page or do you want the budget?
Bailey: You mean the revised?
Champion: I've got the revised.
Karr: You just missed the page. We will send it out again.
Champion: Ijust can't find it, it's in here, Ijust don't know where it's at.
Bailey: It's page number 93.
Wilburn: 92,93.
Champion: Got it. See, I had it right here, Ijust couldn't find it.
Atkins: You're sure.
Elliott: We never lost confidence in you Connie, not once.
Atkins: Ok Ross, that is the best I can do.
Wilburn: Otherwise a couple other things in our Thursday packet, we should have the
agenda from Jim our facilitator for our meeting next week, and Marian did you
have something else?
Karr: Yeah, just a couple things, the legislative day, you have a handout tonight, just a
reminder is scheduled February I st, I need to make some reservations, I know DV
is going, if any of you are interested in going please let me know, that is, that
would be the Wednesday after you have your Monday, Tuesday budget wrap up, it
is possible to be back in time, even with the events as noted there, be back in time
for the Chamber banquet that evening, but I do need to know soon to make the
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reservation.
Champion: Ok, what is the schedule of our meetings for February?
Karr: February is the 13th, it is ajoint work session informal on Monday night and then
the 27'h and 28th are Monday, Tuesday.
Champion: Great, thanks.
Karr: Now on that note too we had tentatively scheduled, I can hear myself, we
tentatively scheduled a the joint hearing, not joint hearing, excuse me, the joint
meeting with the other jurisdictions, for February 22nd, we did that at our meeting
in October. We've have not received those minutes yet so it sort of got lost in the
shuffle, I am wondering if it would be any problem in maybe rescheduling that
meeting that was tentatively set for February 22nd until sometime in March.
Bailey: Hurray.
Vanderhoef: After conventions.
Karr: Yes.
O'Donnell: One question, who all will be here from this January 25th 1 to 3 joint
communications center meeting?
Atkins: As far as I know, everyone that served on the committee, the sheriff and some of
the smaller jurisdictions, we will invite the county board, and really anybody that
has got any involvement in this, it is an open meeting.
Elliott: That's the 25th?
Vanderhoef: The elected officials though from around the county?
Atkins: That I don't know.
Karr: Andy has invited I know a number of them, I know a number of them, he has
talked to all the police and fire chiefs, he mentioned it to me, I know the Board Of
Supervisors has been invited and I think he was sort of leaving it up too the police
and fire officials in each municipality who else in their area they wanted to invite.
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Wilburn: I know the Supervisors will be here.
Karr: Yes, So is there interest to move that until that joint meeting, typically it is a
Wednesday 4-6 type thing, we move it to the last Wednesday in March?
Vanderhoef: That sounds good.
Wilburn: I think
Karr: How about the last Wednesday in March that, I don't have that March schedule in
front of me, that isn't a Monday Tuesday night? You're off Wednesday night and
I will put a note in your packet on that one.
Wilburn: March 29th
O'Donnell: Yes.
Elliott: What meeting are we talking about?
Karr: That's the one with the school board, the city councils,
Elliott: And you will get that to us?
Karr: Yes, so March 29th, 4-6, we went through the meeting schedule for next week,
legislative day please let me know.
Champion: When is that banquet?
Karr: The banquet is February I st and there are no tickets, I put the reminder in your
packet, just confirming by email, the reservation and you just go to the Sheraton
that evening and your name badge will be your receipt.
Atkins: Ok assigmnents, the reserves I think I understand what you want, what you're
options are going to be, you will figure that out as we get through that, emergency
levy implications, short term borrowing, airport rents and what do you want to do
on the franchise fee?
Bailey: I want to know if that case what applications the case has, implications the case
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has for us.
Wilburn: That is an Eleanor question.
Bailey: Yeah, it is an Eleanor question. Why don't you just
O'Donnell: There is so little we can do about that.
Bailey: Right, but it would be good to know. Right. This memo was in the back of the
packet on parking increases, are we going.
Atkins: It was just for you information, I just wanted you to have that.
Bailey: And we are increasing them because??? We want more money?
Atkins: We need more money.
Bailey: And we are going to use this more money for???
Atkins: For a better parking system.
Bailey: Ah, huh. So you can use credit cards in all the parking meters?
Atkins: I hope someday we can do that. They are awful expensive.
Bailey: Yea, I know.
Champion: What do you want to do?
Bailey: Debit cards in parking meters, wouldn't that be great?
Wilburn: ljust have one other quick thing. Dee was up at the State House today and Dee do
you have a quick summary, anything we should know.
Bailey: Are they doing anything up there yet?
Vanderhoef: Yes they are. The league leadership and the ISAC leadership along with our
lobbyist met with the republican head ofthe senate on our property tax bill. The
bill has been written it should come out this week, we're lobbying hard to get it
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into sub-committee so anyone that you could talk to up there, make sure they get a
copy of it as quick as it is out. Then we also were invited to present at the Senate
Local Government Committee meeting on the priorities for just the league and a
week from today we have the same invitation to go to the House and report on
our, and answer questions too which there was quite a bit of interest in the new
revised bill that we have put forward and some follow up questions that they had
they we will be getting information for them, one of things that I asked for tonight
was something that I want to send back up there for possible use as we lobby and
it's the amount of dollars that we lost off our evaluation by the 2% drop, the
Clarinda was the one example we had so there is some interest, the Bill looks
different than it did last in that we are looking to freeze this year at the 46, 45.9
roll back and there is a provision in the Bill to take it up 1 % each year until it gets
back up to 50% in exchange for that, the homestead levy would be discontinued
which is something the State funds so they are getting a piece out of this as well as
we are getting stability and predictability for our property tax revenues for general
funds. So take a good look at the new Bill, there's a few other things in there we
did drop the piece on taxing of non-profit properties that was in the Bill last year.
We took outthe piece, that I know you are all very interested but, it's so
controversial that we're afraid we can't get the Bill to move at this point in time
and that's the classification of apartment condo's.
Champion: Why does it have to be controversial?
Bailey: Because they all own condo's.
Elliott: The people that own them have money.
O'Donnell: Unfortunately that's true.
Vanderhoef: Other than the property tax one there was quite a bit of interest in the committee
meeting on the 25,000 for bid, for projects and there's about 5 different large
groups that have been meeting regularly and they are hopeful that they can come
forward within this next week with something for the committee to react to and
we were finding out today ifthey wanted it done in the form of an all new Bill or
whether they wanted it as an amendment to the Bill, but what they are looking at
is Cities that are under 50,000 would go up in the neighborhood to $36,000, cities
over 50,000 would be going up to $51,000 and then put a GPI escalator on it each
year so it wouldn't become a stagnate number and that seemed to have some real
interest by the committee to take a look at that so that Bill or amendments will be
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coming probably out in the next two weeks and we will want to keep watch on
that to see where the city council might like weigh in on it.
Wilburn:
Thanks for the update. Have a good night.
8:25pm
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