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Home My WebLink About2016-01-04 TranscriptionPage 1 Council Present: Botchway, Cole, Dickens, Mims, Taylor (electronically), Thomas, Throgmorton Staff Present: Markus, Dilkes, Karr, Fruin, Bockenstedt Introduction to City Budget: Throgmorton/ All right, let's carry on! Mr. Bockenstedt. Botchway/ Well I mean I don't speak for everybody (several talking and laughing) take a break it's fine. I just .... Dennis has been sittin' there so... Bockenstedt/ No, whatever you guys want to do. I'm fine with... Dickens/ You got three minutes! (laughter and several talking) Throgmorton/ That's right! (laughter and several talking) Speak up or forever hold your peace! Bockenstedt/ Well hopefully this is for your benefit. Um, this is really something we've been working on for ... uh, about a year, since last budget process, and earlier Kingsley mentioned, um, when we were going through the budget book that, you know, you got a lot of material and you didn't get a lot of time to absorb it and understand what was in it, so we spent a lot of time thinking about what we could do to help you understand the materials and ... and the City bud&et. So you should have received the ... the budget book itself, um, around December 17 or 18th and it's approximately 600 -plus pages. So there's a ... a lot of material in there. Um, we handed out, would have been last week, a, uh, quick reference guide, and that's something that we put together to help summarize some of the ... the major portions of the budget, uh, such as, uh, departments, major funds, um, also some other fiscal information. And so the general idea is wanted to give you, um, a sh... some shorter material to look at, to understand what's in the budget, uh, but then also would just take some time to kind of walk through the budget book to see ... it's really kind of prepared in a ... in a logical manner, but since it is so many pages, and there is so much material in there, that it's often hard to ... to read all of that and absorb all that's in there. So we just kind of wanted to take the time and go through that and we can take as little amount of time or as much as you want to take, depending on how many questions you might have. Uh, what I have up here on the screen, and Pauline, you ... you can follow along at home, if you'd like is (mumbled response) the City's web page, uh, icgov.org/budget, and it ... the budget book is in there with, um, in the total document, pdf document. Um, there's also broken down into the 10 sections that make up the book. And each of those sections from front to the back of the book, uh, the front are a more... summaries, synopsis, and as you go back through the book, the 10 sections become greater and greater detail. And so the back of the book kind of rolls up into the front of the ... front of the book. Um, I'll talk a little bit about the budget process just briefly. Um, since I'm not sure how familiar all of you are with the City's budget process. Uh, there's This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 2 kind of three separate pieces of it. Uh, in July and August, uh, we pull together performance measures that are gathered from the departments. So in July and August we have a budget analysis that meets with departments and goes through their performance measures, and begins to accumulate and gather that information. Uh, in September, uh, that is when we start the capital improvement program process, and it is a separate process that runs somewhat parallel to the budget process, but a little bit earlier. So there's separate sets of forms, separate process, separate meetings that take place for just the capital improvement program process. And then in October we begin the budget process, a month later. Um, and that's where departments submit their budget request for ... for services, staff, and ... those processes run independently, uh, with meetings with the City Manager's office and then those really kind of all end and come together, uh, in December and are pulled together in the budget book. Um, so that's... really the brief part, and then we get that put together, let Council review it. There's a public hearing in March and then the adoption in March. Um, it's certified with the County Auditor and the State, and that becomes the City's budget on July 1St of the following year. Um, and then the process starts all over again the following July and ... and so forth. Um, so (mumbled) have any questions about the material or the process, to get started. I'll just kind of walk through, uh, the portions of the budget book, uh, starting with the introduction section and this introduc ... introduction section, uh, really begins, other than the table of contents, uh, the main piece of that is the City Mana... City Manager's transmittal letter. And this is really the economic, or I'm sorry. The, uh, executive summary. See if I can get this to ... and the page numbering on this matches the page numbering for the pdf. So the page numbering on these pages matches the pdf page numbers so if you're looking at your pdf or you're looking at the book, the page numbers should all be the same. Karr/ If I could just interject, this is ... on your, under 'agendas and packets,' this is also the same document you've received hard copy of, for some of you, but it's also in the Information Packet of the 18th, labeled 'proposed budget.' Same ... same addition. Bockenstedt/ Correct. So on page 11 is the City Manager's transmittal letter, or the executive summary, and when I say it starts, you know, with the condensed version, this really summarizes pretty much ... all of the budget in a ... in a 15 or 20 -page document. So, you know, if you .... you had one thing to read for this entire book, this really gives you the ... the short, brief overview of the entire budget. Um, you know, the policy development and the structure of the budget, tax rate, that type of thing. And so that's... that's the, really the condensed version of the entire book. Um ... also for you... skip ahead to page 28 ... this is also more or less the policy and the ... and the broad view portion that make up the budget. It is the summary of the City Council's strategic plan. And that strategic plan was developed as you were, uh, in that development process, uh, this year, or this, uh, or made this year, and this is really the ... the Council's overall direction for the budget and where, uh, the City's going to go. So, the strategic plan really is the overall guiding document and principles for the development of the budget, and um, what has been produced to put into the budget. This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 3 Throgmorton/ Dennis, I think you know that we'll be visiting, uh, revisiting the strategic plan in, uh, a forthcoming work session, trying to refine particulars of it. Uh, how that turns out I don't know — we'll find out. It's up to the collective wisdom of the Council. Markus/ So to be clear, this is the old document. This isn't the one you (mumbled) Bockenstedt/ Yeah, this is ... this is (both talking) Markus/ ...so we'll come back and present ... you know, go through the strategic plan; one that'll actually be adopted by this Council will be rolled into this budget. Throgmorton/ Good deal! Botchway/ Wait, I want to kind of focus on that particular point. So you're saying that the new strategic plan will be rolled into... Markus/ This budget. Botchway/ ...this budget document. Markus/ Yeah. This is the old one. This is 14/15 (both talking) Botchway/ Right! No, I totally .... no, I understand that, but my question I guess then centers around, because going through the document, um, it highlights, you know, healthy neighborhoods as, you know, whatever the reasons may be. I think that's important. Markus/ Sure! Botchway/ But I think my issue, uh, focuses around that inclusive and sustainable element, that was talked about previously. Markus/ Well... Botchway/ And so I guess my ... my issue, my reasoning for bringing it up is one, um, I know that we have, okay, equity report as a way of providing demographical information and so forth, um, around a lot of the issues related to what we're working on, but it doesn't appear here which ... seemed to be problematic for... especially from a measurable standpoint as well. As I was looking through some of the numbers, I mean, I looked at police, looked at other places, and that was ... that was problematic, and so I don't know if we want to have a greater discussion on that, um, because I do think ... you know I will say that my thought on that was that ... there would be some type of inclusive or sustainable elements added to each particular portion of what we were reviewing. Markus/ Well, as you go through the document, inclusive, uh, and sustainable were part of the old document, so there is reference back to inclusive or sustainable. Going forward, we're going to have, uh, Jim and I have discussed this, uh, a work session or two, um ... to This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 4 look at what was ... that came out of our fall session, and then have the Council Members, um, add commentary to where they want this to go. The whole structure of the strategic plan from its very... inception five years ago was to ... um, have outgoing and incoming Council Members and, uh, this obviously... this... this transition is a much more drastic transition than probably has occurred at least in the last five years. But one thing about the process that remains true is that ... it was the new Council that always approved the strategic plan. So, the new Council will have an opportunity to take what was discussed, and you'll recall Jim had kind of prepared a whole list of ideas he had. I'm sure other Council Members did. Was probably one of the first meetings that the new Council Members were kind of brought into. So the plan is to have some work sessions, actually starting tomorrow evening for the discussion... then going forward, having some I think more in-depth conversations, and if your issue is the equity report coming out of, you know, our Equity Director or sustainability issues, uh, we'd like to talk to you about some of those things too in terms of where we go. I don't know how much in-depth they're going to get into it tomorrow evening, but it seems that ... moving forward, you're going to have a plan that this group approves. Okay? That's what we need as a staff in terms of our direction as to what we're going to accomplish over the next two years. So that was always the contemplation (noises in background) I think this year it just appears to be a, maybe a more significant, you know, difference. So... Cole/ And this is just a draft too, subject to modification, correct? Markus/ Yeah, it ... it, in fact ... well (both talking) here's what I'd say to you though. There's been a lot of effort that went into that document to begin with, and so as I counseled (both talking) Throgmorton/ You mean that document that.... Markus/ The fall document! Throgmorton/ Yeah. Markus/ The fall document. What I counseled Jim about was .... I think it would be best to walk through those items ... add and subtract as you go through those different categories, you know, change functions, but to have a very deliberate conversation during a work session, or two, to get to the ... whatever the plan is that you're going to be approving. Throgmorton/ To ... to kind of echo what Tom's already said, uh... elab... and elaborate briefly, uh, I expect tomorrow night we will briefly discuss during our work session what steps we will take to adopt a final version of the strategic plan. Fruin/ If I could make one ... one quick point. I want to tie this discussion back to the budget. Um, as Dennis outlined, the internal steps that it ... that ... that we go through to present this document to you, um, staff is more or less done with this budget by the time Thanksgiving rolls around. Um, however, although you don't have it, a new strategic plan that is adopted, we had an idea on where you were going, so there were some This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 5 modifications made later than usual from our end, uh, late November, early December, um ... uh, to ... to get us started towards where we think you're going. A couple of those items are mentioned on page 12 and 13 of your executive summary, um, and on Saturday, uh, when we go through the budget with all the departments, uh, we'll ... we'll note some areas where we made late budget modifications, um, again in a direction towards where we think you're going with your strategic plan. Markus/ And ... and to just add to that, the other thing I would say to you is if there's other things that after your discussion as a part of the strategic plan — that doesn't mean because this budget is moving forward at the same time that you can't amend it, either, you know, before it's actually adopted or subsequent to its adoption by moving different funds around, as long as we have those funds and we have made those, uh, accommodations to make that possible. You know, it's all a matter of, you know, scope or ... or the size of the request, I suppose, but ... if that were the case, even if it were in advance of the actual adoption of the budget, you know, we ... we may want to phase certain things over one or two years anyway, and when I say'we,' that's inclusive staff, Council kind of deliberation and discussion. Botchway/ Tom, you answered my question. I guess I'm (noises, difficult to hear speaker) on, and I'm just looking at 205 and I don't want anybody to flip to it, is that with each objective, as you go through, you know, the highlights or whatever the case may be, but not all of them are listed. So even if you take out the inclusive and sustainability (mumbled) it's, I mean, with... recreation department under Parks and Rec, it only focuses on solid financial foundation, healthy neighborhoods. And I wonder whether or not, I mean ... my question is is whether or not there was any discussion as far as why the other objectives weren't addressed, even if it was to say (several talking) Bockenstedt/ Are you referring to the performance measures (several talking) Botchway/ Yeah! Bockenstedt/ And ... and the development of performance measures is ... is somewhat tricky, um, because (both talking) Markus/ ...involving processes... Bockenstedt/ It's evolving ... it ... it, uh, takes a ... a matter of time to not only developing measures, but then tracking them. So and we've spent a great ... great deal of time in the last couple years just developing measures, time into the Council plan (noises in background) so a lot of those may say 'new measure,' you know, so they (mumbled) one or two years of measurement, versus you know three to five years of measurement, and so it's really an evolution of developing those measures, and then the real benefit from those ... is tracking them over time. Cause if you take one of those measures and look at it at any one point in time, may not tell you a lot, but when you look at that measure over a series of two, five, 10 years, it may tell you a whole lot. So ... you know, you have to think about those on maybe a long-term scale and so, you know, if we wanted to integrate those in to This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 6 different departments, we can certainly do that, um, but realize that when we do that, it still may take two to five years before you would get enough information where you really get something useful out of those measures. Markus/ But it's great that you brought the issue up, because what I would suggest to you as you develop new ideas for what you want to accomplish, you should be thinking about what ... not just what the scope of what you're talking about is, but what do you want to achieve and so that that can be verbalized, that can be discussed, at the time we have those conversations in terms of the strategic plan and then ultimately as we roll items into the budget and carry that through to the budget document so that we can develop the performance measure based on what you're actually trying to achieve, and sometimes you'll find you're gonna struggle with that, trying to, you know ... it ... it's a good idea to provide funds to a certain activity in the community. Okay? But then what do you want that activity to actually achieve? Okay? So that two years down the road, did we get what we want? I sit on the United Way board and we had a very... detailed strategic plan, and so when we went back and looked at the strategic plan, and we said we're investing in this and we want our children to be at this point. It was ba ... basically a child - based... education format, and so when we went back, we didn't move the needle like we wanted to. So then we came back and said, you know, what's... what's, why hasn't this happened and so we had to evaluate those things. So I think those are things that you want to be thinking about as a deliberate body in ... in telling us what actually do you want to have at the end of whatever process or time that you're considering for these things. That's critical, and you guys ... will know that. You'll... you'll feel what you want to accomplish is sometimes difficult to verbalize. Throgmorton/ Some of, uh, some of this discussion points out, Kingsley, what I was referring to as incremental, step-by-step changes, uh, I ... Terry, Susan, tell me if I'm wrong about this, but my recollection is that the budget document, six years ago, looked significantly different from the one we have now (several talking) This one's much clearer in terms of what's being done, what it seeks to accomplish, and in fact it's comprehensibility, you know, so uh, things... things can't happen instantly (laughs) Yeah. Markus/ We're moving in those directions, but you know, again, you need to verbalize what you want us to get done, and we can roll that into this document. Throgmorton/ Back to Dennis! Bockenstedt/ Okay! So I'll skip ahead and I won't, uh, spend much time on ... on, this is on a page (mumbled) the other planning processes. Uh, this is also part of your quick reference guide that was handed out, and this just discusses all of the other planning processes that go on throughout the city, so strategic plan gives the Council....or the City overall direction, but there's a lot of individual departments and facilities that also do, uh, planning processes and that are updated every five years or so often. So this just gives you an idea of all the different planning that goes into the different parts of the City's operations. Um, on page ... 32 is the City's organization chart and, um, for most people see this as just a normal document. This to me really is a major part of the building This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 7 blocks for the entire budget book, and the structure. Um, we're ... the different departments, uh, their different divisions, uh, we try to build a lot of the ... the book so that they match... these... these functionalities in these departments, and so ... and when I get into these early pages of the org chart and the fund structure, those are really the building blocks for the entire bu... the entire budget book. Um, everything kind of surrounds ... and organized in those manners. Botchway/ Dennis, before you go on, um ... and I'm not ... I guess I'm asking for a proposed change. The reference to citizens at the very top, I don't know ... I mean we worked through this with the CPRB and some other things (mumbled, away from mic) change to residents or Iowa City (noises, speaking away from mic) area, but... Bockenstedt/ Yes! Botchway/ ...and maybe you're already doing that (speaking away from mic) Bockenstedt/ Yeah, we've .... yeah, we've tried to place that work with community wherever possible, so ... so these ... these early documents really kind of set up the structure of the entire document itself. Um, and then from the org chart, there is a section ... and this is beginning on, uh, 33 and this is also part of your quick reference. It really just gives a brief summary of each department, and it kind of talks about the boards and commissions that serve under'em, uh, lists how many personnel are in that department, uh, the department head, uh, and just a description. I won't go through all of those, but there's also ... each of these is ... has a little brief synopsis in that quick reference that we handed out. I'm gonna skip ahead to page 57. This is the other (mumbled) with the org chart that really builds the structure for the book, and this talks about the ... the fund structure for the City. And the City has a ... has a number of funds. There's major funds, which as part of the reporting for the City's financial report it's a ... it's really based on the size of the fund from a ... a balance sheet or expenditure revenues. So if there's a ... a large amount of revenues and expenses or ... or assets, it's considered a major fund, uh, which means that there's more activity, more dollars involved really. Um ... and ... the budget sections itself are also organized by, uh, fund type. Um, and this ... we'll get into a little bit of the accounting because there's a real interweave in the budget book with the accounting for all of the City's operations, and so there's this balance between the accounting structure and the budget structure, and there's some overlap there and then there's some diversion, as well. Um, but it all kind of comes together in ... in different documents. Um, the general fund shown here is really the City's major fund. Most all of the City operations are in the general fund, and it's kind of a default fund. Unless there's a reason to put it in another fund, it goes in the general fund. So it's kind of the catch-all. Uh, special revenue funds, uh, those really are somewhat restricted just by their definition. Those are to account for, uh, revenues that are for a specific purpose. Now there are revenues like that in the general fund, such as the hotel/motel tax, but sometimes those revenue sources, like the road use tax monies or CDBG, are such that separating them out (mumbled) is a better way of accounting for them and tracking the balance of those funds ... cause you know when you're looking at spending that money and accounting for it, how much is still on hand, it can be a little easier if...if you got that separated out into a This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 8 separate fund. Uh, the major one of those community development block grant and employee benefits, which is a ... a tax levy itself for like health and insurance and other, uh, employee benefits, such as worker's comp. Uh, the debt service fund is the ... the primary, there's also a debt service property tax levy. This really, uh, just pays off the City's debt. That's really all this fund does. Uh, permit funds. There's just one perpetual care fund. Um, there's not much activity in it. Uh, there's ... in fact you'd be hard pressed (both talking) Markus/ It's a cemetery! (laughter) Bockenstedt/ (laughs) Cemetery! Hard pressed to find ... much in the book in regards to it. Um, the enterprise funds. This ... this is also another significant part of the operations, uh, probably one of the more complicated areas of...of the book, and if you're reading through it, and these ... the enterprise funds are really the City's, uh, funds are treated like individual businesses more or less. Um ... they're ... they're operated, you know, they record depreciation, uh, you set fees to try and recover the costs of that operation. Now not all of 'em do that, but the general idea is that you're operating that fund, like the water fund or sewer fund, parking fund, as a business. So that's why they're called enterprise funds so they set rates, fees, or act independently of the ... the general operations of the City. And then the capital projects funds; that really accounts for the City's capital improvement program, the five-year capital improvement program. All of those ... adopt a budget on the State budget forms, and you'll see those when ... when we, uh, once the budget's set by the Council, we'll come back with the forms. The State forms that we have to squeeze all this into, and all of these funds, uh, we have to record a budget with the State. Uh, the non -budgetary funds are the internal service fund operations, which really ... only serve the City itself, like the City's equipment fund, um, the health insurance fund, the City's risk management fund. They don't serve the general public, uh, like these other funds do. They really only serve the internal operations of the City and they charge fees back to the City's various operations to pay for activities. Markus/ So why don't you explain transfers at this point, so that they understand when they're reading that because if they've even got 10% of their head wrapped around fund accounting, which would be a (laughter) accomplishment. Uh, transfers, you'll see that sort of thing show up sometime in the document, so just explain (both talking) Bockenstedt/ The transfer's really a movement of...of money from one fund to another. So, now internal service fund (both talking) Markus/ Give an example! Bockenstedt/ Urn ... we ... we (both talking) transfer money (both talking) Markus/ How about an automobile? From the Police Department. How would you charge that back? This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 9 Bockenstedt/ Well it .... for lack of...I'm trying to think of...we transfer some monies from like the road use tax fund was being transferred to the general fund to cover for a forestry worker, that would do tree maintenance in the right-of-way. And really it's just a transfer out from the road use tax fund and then transfer in from ... into the general fund. And there's a summary in here that shows all the different transfers, ins and outs, um ... you know, but that's the general idea is if...we, like we move money out of the employee benefits fund to the general fund to cover the cost for the employees' insurance benefits. And so you're just moving money from one fund to another as a transfer in and out. Markus/ It's a ... it's an attempt to attribute the appropriate cost to the function that is actually creating that cost, or in some cases the income. Throgmorton/ If...if I could in ... intedect for just a second. Pauline, Rockne, John, if...if you haven't guessed it already, we are very lucky to have Dennis as our Finance Director. Taylor/ It sounds like it! Throgmorton/ We ... we've learned he does a superb job in putting this budget together and kind of keeping us on track financially, uh, so ... just, I just want to acknowledge that because it's really important for our operations. Taylor/ (mumbled) taking lots of notes! (laughter) Bockenstedt/ Well there's a lot here and so (laughs) um, you can feel free to ask questions any time. Right after that the ... the chart of the structure, there is an actual summary right after that on ... on, uh, page 58 here ... and 59, that talks about each fund type, and what it is. And there's also a summary on the next page, on 59, of what it ... of what the major funds are. So, you know, you can look at that ... if you look at the different sections and you ... and you want to know kind of what an enterprise fund is, and ... and I will mention at this time, there is a glossary in the back of the book (mumbled) section. So, that could be very helpful to you. It's a very comprehensive glossary, cause a lot of these terms may not mean a lot when you look at them, and that will help you understand what those are. Throgmorton/ So ... you make me think of something, Dennis. Uh, is there a search ca ... capability with regard to key words? Bockenstedt/ I don't know that there is. (several talking) Karr/ ...using laserfiche, uh, there would be using laserfiche. This is not ... this one, but in the Info Packet that I mentioned earlier you would have that capability. Throgmorton/ Interesting! Bockenstedt/ Yeah, to do this as a searchable pdf would create such a large file size. It's already a pretty large file that ... I'm not sure what it would take to download it...at that point, but ... as Marian mentioned, the laserfiche ... sounds like you can do that. Um... This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 10 Thomas/ Dennis, I have a ... one question related to the summary that you talked about a little bit earlier. Bockenstedt/ Uh huh. Thomas/ Um ... it was under the issues on the horizon. Bockenstedt/ Okay. Thomas/ And, uh, you know, it was noted that (clears throat) there would be an increase in street re ... rehabilitation, water main repair/replacement, and ... and so my question, and I'm ... it's partly derived from where I live in Iowa City, on the north side (clears throat) is, um, you know, what ... what is our overall sense of...the, you know, the cost or our ... the liability have ... we have with that ... with that infrastructure. Um, you know, the streets in my neighborhood are in really bad repair (laughs) so, I mean, I know there's going to be an emphasis here and I was interested and happy to hear that there was going to be this increase in budgeting for infrastructure, but it sort of begged the question to me of, okay, where are we big -picture wise. Markus/ Yeah, if you take a look at our CIP, we have a ... we have more projects, I think, still on unfunded than we do on funded, which'll give you kind of just a taste of that. I'm not sure it goes into the ... I don't think we have a parameter set for what we'd like all streets to look like, and then ... and then the differential between what our existing streets are. We're starting to do more and more of that kind of evaluation, but what we do is we plug a certain dollar amount in every year and hit what we can. With the gas tax increase, now we've I think probably doubled, uh... what we can spend on road repairs and things like that, but what we also do is use the strategic plan then to focus on, um, like the core ... uh, community, uh, where that investment goes. So those things are being looked at as we ... as we address those. We had quite a conversation just about alleys. Um, and... Thomas/ About what? Markus/ Alleys, um... Mims/ Downtown alleys (mumbled) Thomas/ Oh, yeah, alleys, yeah! Markus/ Yeah, because the ... the policy heretofore has been special assessment. We haven't had a single taker on special assessment. I think they're waiting for us to ... to take on the alley issue, and so ... I'm not ready to concede that some part of it shouldn't be special assessment, but maybe we could come up with a formula that'll at least get some (coughing, unable to hear speaker) moving in the direction, cause these alleys are starting to be ... absolutely deplorable. This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 11 Throgmorton/ I can think of a few! Markus/ Yeah! And some of them, quite frankly, serve almost as a, you know, kind of a transit connection or a road connection. So ... all of those things come into play. And ... and that's why, you know, it's just not capital improvements, but ... when you start thinking about other programs where you think we may have a deficiency or where you want to move, um, to ... you gotta think back about ... just that type of question. Well what don't we have funded so far, you know, that are our core responsibilities to begin with, and how do we ... how do we make sure that we don't completely go off on a direction that causes us to get even further away from those core responsibilities too, so it's a ... it's a real balancing act, and it's ... it's something where I think you have to develop that financial acumen to understand this document, and then understand how the priorities are being, uh, attributed as to where we go. So ... incrementalism isn't a bad approach ... in that regard! Thomas/ The other general comment I would make is I ... I am very keen on seeing information... uh, communicated geographically, since we, as a city, we are a land mass and, um, using geographic display as a way of showing where ... these budgets, where these expenditures, where these capital projects and so forth are located, so that we would see that distribution. Bockenstedt/ There's a ... there's a separate meeting planned on January 1 It', uh, just for the capital improvement program, so there's... there's a ... there's an entire separate meeting that's several hours long... Thomas/ Right. Bockenstedt/ ...that'll just discuss that program itself. I will tell you that we have seen a large influx of revenue from the increase in the gas tax and the expenditures on the overlay program have increased significantly in the last couple years. Um, but as far as ... uh, talk about specific projects, spending... there's... there's an entirely separate meeting devoted just to that topic. Markus/ And I, you know, that ... that, I think that's doable to do some sort of GIS (mumbled) where the funds get spent. Thomas/ Uh huh. Markus/ Um ... careful what you wish for in something like that. Thomas/ Well I, again, I ... the ... the public experiences... that... that's how they, we all experience our world is ... is what are the conditions like as we experience them, not reading a document that's broken down into, you know, the bureaucratic components and so forth, so, I mean, yeah, it could either work for you or against you, but uh, I mean, it would begin to show where the emphasis is ... is going. This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 12 Markus/ Yeah, and I think though, John, I think what happens is it becomes a distribution model, right? So ... there's places, you know, that generate more income than they extract in service. Okay? So ... my point in telling you to be careful what you wish for is we start to extrapolate that ... you live in a community and the whole community has an expectation that improvements are going to be made when they're needed and so forth, and so I'd be careful to get too parochial... Thomas/ No, I don't ... and I don't even mean it in that sense (both talking) Markus/ I know you don't but I'm saying ... the information may suggest in any given year (both talking) Thomas/ Right! Markus/ ...why are we spending all that money over (both talking) Thomas/ Yeah, well it has ... it does have to be framed in a way that (both talking) Markus/ Exactly! Thomas/ ...that that's understood... Markus/ That's my point! Thomas/ Yeah. Bockenstedt/ And ... and another thing, and the Public Works Director can address this far better than I can, but I do believe they are in the process of...of grading the streets, and assessing them, um, to know where to best direct those dollars. Throgmorton/ I know we developed, or authorized a ... a, some kind of computerized tool for measuring the quality of streets. Bockenstedt/ There... there's a ... a standard mechanism for measuring the quality of the streets, um, and I'm sure that'll be a topic of conversation at that meeting. Fruin/ I'll make sure that Ron Knoche addresses that when the road use tax is discussed. Throgmorton/ With ... with regard to John's point, having to do with GIS, um, I was wondering something similar with regard to revenues, as in square mile, and ... and the geographic distribution of property tax revenues in ... dollars per square mile. Uh, I ... I know there's variation, but I haven't seen a, you know, a 3-D kind of GIS display of that and that might be very enlightening for all of us. Just a (both talking) Markus/ I just wonder if the Assessor's Office has that kind of information, at least on a value basis, and then whatever tax rate you apply would be consistent (several talking) This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 13 so ... (several talking) maybe the taxable value is what you want to know. And I'm ... I'm trying to thin of what logical geographical breakouts would be ... we'll have that conversation amongst staff and see what we can come up with. Botchway/ (several talking) Another point I want to bring up is around, um, FTE. Is there any way to actually put the ... the number of people that we're talking about, um, you now, for the Airport, it's one FTE and so I'm assuming it's one person. Markus/ That's what it is! (laughter) Throgmorton/ He would be Mike! (laughter and several talking) Botchway/ But I know that for, uh... uh, Police ... I keep going back to Police cause I spend a lot more time there, um, was ... it's 80, but it said 83, and so ... I'm ... I'm just stating where within the kind of part that has laid out as far as (mumbled) putting the actual number of bodies. (several talking) Markus/ ...have that. It's in... Bockenstedt/ It's in there and ... and I'll get to that. Markus/ (several talking) There's a summary document that shows for each department, under personnel section (several talking) all laid out. Botchway/ ...with that initial summary, as you're going through, what the (mumbled) Bockenstedt/ That ... yeah, I see what you're saying. The ... you've taken, cause if you go to each like ... when you break the budget ... book breaks down by department, then by division, and then by activities within those divisions, and if you get down to that activity level, it shows each position and then the quantity of each of those positions in each activity. Botchway/ Right. Bockenstedt/ So let's say in ... uh, police patrol you might have, uh, 60 patrol officers. Now... you know if you took all of those and rolled 'em up to the front of the book, you could do that. It might add another ... three or four pages to the front of the book. But I mean you could certainly do that. Botchway/ I'm just talking about when it says Airport personnel, making another box (mumbled) Bockenstedt/ And ... and I'll ... I'll just go ahead and jump (both talking) Botchway/ I know it's in this framework but as we ... as you just talked about, if anybody's trying to take just a kind of a summary look at the budget document, all the information, or a good kind of grasp of the information is going to be found in this budget summary, and so to that point, you know, adding that information in there, I just think (both talking) This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 14 Bockenstedt/ And we can do that. It ... it, there's some compromises between quantity of information and so that's where you try to build a ... the summary's up front, so if I just want to see how many employees the City has and where are they at, versus if I want to know the Airport, how many people they have, what other positions... Botchway/ So go to that particular (both talking) Bockenstedt/ You go to that particular section, but... the... part of our problem is .... is people want the book shorter ... so then we keep adding to it and every time we get done it's longer than it was last year (laughs) and so we can't seem to get the book shorter (both talking) even though we keep trying (several talking) but I see your point, I mean (several talking and laughing) Cole/...this is just an overview today, right, I mean we're not being operational. So I think that's the focus for today. Bockenstedt/ Yeah. But ... I'll just flip to the Airport and... since... so I'll just kind of jump ahead here a little bit. Urn ... to talk about how each of these sections is broke down by the funds, as we jump into the fund discussion.... Markus/ F -u -n -d, not f -u -n. (laughter) Bockenstedt/ Well this is fun for me! (several talking and laughing) So for each fund, as you get into the book, you know, fund types and fund, there's... there's a basic structure to that section. Um, so if you go to the enterprise fund, there's the Airport fund on page 4...53 and for each fund there's stretches a summary of that fund, a narrative about that fund, and we try to put a lot of information there about ... where that fund came from, what type of fund it is, couple years of history of activity in that fund. So you get some background of what's going on in there. So you could read that, this narrative of each fund, and say, oh, okay, the Airport fund, sometimes they have ... when it was created, when they did their master plan, different information, some history of fund balance, and those ... and so there's some discussion and some charts about its revenue sources, its expenditures, and so you could read each summary from each fund and have a good idea maybe of what that fund is and what's in it. Um, after that we actually then have a statement that shows in numbers what that fund looked like. You know, a lot of people look at this and they just see a lot of numbers on the page, and so ... you know, sometimes it's easier to read that narrative, then just look at that statement and try and interpret what the revenues are, what the expenses are, but they're both there. When you get past that fund statement, then there is ... it breaks down by those divisions. So in the Airport there's essentially one division, that's the Airport operations division, and then there's another narrative on just that division. You know, it talks about what's in it, and this is something we gather during the budget process. It talks about the highlights of the last year for that division, what its accomplishments were, what its challenges are, and then also the summary of the FTE in that division. Uh, we also talk about any staff changes, um, any service level changes, and any financial highlights within that division, as we go on to page 456 and This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 15 457, and so you got your fund narrative, your f...your number's statement, and then you have those divisions and you summarize the operation of that division itself. And when ... this Saturday (mumbled) budget meeting, the department heads will get up and talk about their different divisions, you know, that they manage and what's going on. And this is kind of the crux of some of that discussion we'll have on Saturday. Um ... then after that, uh, narrative for the ... then the division's goals and objectives, and I think this is what Kingsley was referring to ... for the performance measures, and these ... we spend a lot of time trying to develop these, link 'em to the strategic plan, and develop them over time, and like I said it's kind of a moving target because sometimes you get going and you go, oh, I got a better idea, or something I think would be better. I think our approach is we want to make these... practical. We talk to the division heads and say, well, what makes sense to you? You know, what do you look at, I mean, if the division head looks at these numbers when they are looking at their operations, it makes sense to put it in here, because then it would make sense to have other people looking at it. But we also try to look at those and see what's important to the overall strategic plan of the City, as well. Once you get past those performance measures, then there is kind of a financial summary for each activity. We're talking about, you know, like in this case there's only one activity in the Airport, uh, division and that's their operations. How it's funded. Where the money is going. In this case we break it down by personnel, services, supplies, uh, it talks about their staff breakout. This only has one person, airport operations specialist. It gives some history of those positions, and then it shows what they're spending their capital outlay on. So ... if you want to look at a department, up front has the summaries. Then you get into each funded as those divisions, what's in it, the summary of that division, and then as you get into those activities within each division, it talks about that finer level of detail, that breakdown that I was mentioning as you go through the book, and the staffing level of detail, the capital outlay level of detail, and ... and so you can start at the front, maybe see what you're looking for, what interests you, and then go further into the book to read more about it, and get that information. So that ... that's the general structure. Now the book itself is broke into those fund types and so some funds are small, like the Airport, per se versus... you've got the general fund which has a large amount of narrative in regards to the general fund itself. Um, I'm going to go back to the introduction section, uh, page 60. And ... (mumbled) I won't go through all of this, but ... um, you know I ... I've talked about the, um ... uh, the departments and their divisions and the org chart, and then the funds ... that are in the budget. This is kind of where they merge together. And this talks about each fund and what departments are represented, and it's also — when you look at that quick reference — it talks about a department and what funds they manage, like the water fund, waste water. If you look at this breakdown, you can pick a fund, um, and I'll just take like, uh, the water fund here. This is on, uh, page 62. And the water fund, uh, is (mumbled) Public Works department and that's the water operations. So ... when you look at a different fund or a different department, you can see, oh, that fund, like parking fund is handled by the Transportation and Resource Management department, and the one division in there is the parking operations, and so this is kind of...when you look at that structure of the book, this is kind of where those departments meets funds, and what's... what's in those different sections of the book. So that's really the introductory section. Is there any kind of questions about, and like I said, This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 16 that's really just your broad look of policies, of departments, funds, and really what's kind of...really sets up the whole book structure -wise. Cole/ I have a question on the special revenue fund, of particular I'm thinking of the UniverCity Program. Bockenstedt/ Okay. Cole/ It's my understanding that that was originally funded through the State of Iowa grant and that it ... is a limited amount of funds, after those are exhausted. Does that then transfer into another unit or ... or how does that ... how does that work if you want to continue funding a particular project? Bockenstedt/ Well the ... those funds did run out, several years ago. I think the initial year of that was funded partially through grant money. Cole/ Okay. Bockenstedt/ Um, but there was also contributions from the UniverCity itself, University of Iowa, uh, money... dollars from the City, all went in to create this program and it was put into a special revenue fund and I'm not even sure what year that might have been ... 10 or 11. Oh, going back a few years. Uh, those funds were exhausted. That program was moved into the general fund, um, and is now primarily funded through general fund operations. Cole/ Okay. Markus/ And not only that, the University used to participate in that program. Cole/ Okay. Markus/ And I can tell you at some point, um, the University decided that wasn't a program that they could participate in any more. Cole/ Okay. Markus/ You'd have to get all the details about where that came from (both talking) Cole/ ...new administration ... (both talking) Markus/ Well, and ... what happened is, I think we got a little ahead of ourselves on inventory. We've now cleared out quite a bit of the inventory of houses that we own, because once you buy a house, you have to rehab it. You have to find a buyer. You have to, you know, hook the buyer up with the mortgage company to secure the mortgage to take us out of that issue and so, you know, there's... there's a lot involved. I think we're down to what, four or five houses per year now is kind of (both talking) This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 17 Cole/ And then if you do get new funding from external sources, is that then flipped back (both talking) requirement that (mumbled) (both talking) Markus/ Well, you can expand the program or you could supplant the (both talking) Cole/ ...but it doesn't have to be (both talking) Okay. All right. Markus/ You could do either. Depending on the terms of the grant that you might get. Cole/ Okay. Bockenstedt/ And ... and we've used general obligation bonds for two years to fund that program, and then this year we moved that to just general fund funding instead of issuing long- term debt. Cole/ Okay. Bockenstedt/ Uh, for that program. (mumbled) allows us to do fewer houses, but we're not having to borrow money to ... to do that program. Markus/ Each one of those houses is usually... we're into it for what, $50,000, cause that's what we ... that's what we'll invest, up to, in a house to get it ready for occupancy. And that's... that's our piece of it, but we have the carrying costs to begin with until we sell it. Bockenstedt/ Sometimes you'll see a fund in here that, a UniverCity fund, and if there's any ... activity in the last two or three years, we keep it in here and once there's no activity in the last three years, then ... then it comes out of the book. Cole/ Okay. Bockenstedt/ That's just so that ... if you look at those beginning ... and that history, and it's all ... we're not pulling information out and saying, well, that program's done. If it's been in there the last three years, it'll stay in there until that period of time (coughing, unable to hear speaker) I'm gonna, uh, go to the financial section of the book. This is the second section, um, and this ... on page 65, there's a ... a summary of the preparation of the budget itself. So this is a several page narrative that talks about, you know, how the budget was prepared, uh, the steps we go through, uh, you know, and ... and at the end of that, uh, there's an actual calendar that we set up. So there's three or four pages that talks about how we go through the budget process, how the budget is amended, um ... all the different steps that I talked about earlier, and then on, uh, page 69 ... uh... is the actual calendar where we ... we create a manual that we send out at the start of the budget process, to all of the departments, and we set a calendar of dates. You know, when documents will be due, when meetings will be held, and when we expect the budget book to be issued. We also set the...the dates that we anticipate for the public hearing at that time, and the adoption of the budget, and so this calendar is laid out many months in advance of actually This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 18 when ... when we will step through it, and so that calendar is on page 69 and 70 in ... in the book. Then starting on page 71, uh, there is a ... a brief summary of this and that quick reference I handed out, and that is the, uh, financial and fiscal policies, um, that were used to help prepare, uh, this document and this budget. Um, some of these, like the debt one that was adopted by the City Council, has a summary in here and some of these are just adopted as part of the budget. Uh, but it sets fund balance levels, uh, how much expenditures we expect to be covered with revenues, um, really kind of sets the general financial guidelines, uh, for the City's operations in the City budget. And I won't go through all of that in ... in a tremendous amount of detail. Um, and page 78, uh, this was a section we added last year and um, and that is the long-range financial planning, and this is something GFOA says we don't do enough long-range financial planning, but I think they added... something in mind, so we took all the long-range financial plans. We actually do participate in ... and pulled 'ern all together and ... um, you know, this include, you know, like our analysis of property tax reform. Uh, we had a water rate study that we used. Uh, we ... do a lot of replacement analysis in planning for busing and large equipment. Um, we hire actuaries to look at our insurance reserves, and so this section just talks about all of those different long-range financial plans and analysis that we are doing, and that are being incorporated into the budget. Um, so you can look at that. Like I said, there is a brief synopsis in that quick reference guide that I handed out, to look at all the different... studies and plans that we ... we pull together. And then, uh, I'm gonna jump ahead then to, uh, page 84 and this ... the financial summary. This is more like the statements. This is the numerical stuff. Some people, um, may have an acumen for this, you know, some people don't. Like I said, a lot of people look at the numbers and ... and that doesn't mean anything to 'em. Um, but this is all the, starting on page 84, is the financial summaries of all the funds, kind of condensed into one statement. So it shows the beginning fund balance, revenues, transfers, expenditures, and what we project the ending fund balance to be. So these next few pages is really...just a, kind of a numbers summary from the whole book. Some people will be very interested in this. Probably a lot of people will not be, um ... but this ... these are the numbers that we'll pull together and put in the State budget forms when we submit that budget to the State. And these are also the numbers that help determine water and sewer rates, you know, property tax rates, um, but this is just from a numerical perspective of how ... of what the budget looks like. Um, if you go to page 87, we do have some charts and graphs in here for people that prefer that (coughing, difficult to hear speaker) information. Just so you can ... lot of times if you want to look at trend information or if you wanted to see what's in those numbers, that the charts and graphs really help visualize what's there. You know, so you don't have to try and pick that out of the numbers yourself. On page 87 is ... shows the revenues by type. You can see the property taxes is ... a good one-third of the City's budget revenues. Uh, charges for services, which primarily relate to enterprise funds that are self -funding, um, is about 25% and then intergovernmental sources, which would include road use taxes, um, other grants, CDBG, that type of thing account for about 20% of the City's budget. Um ... also has expenditure totals and ... if we go forward to page, uh, 91, it shows where those dollars are being spent by department. So you can see Public Works is ... is the largest department of 22% of the City budget. They've got the larger, uh, enterprise operations of water and sewer and storm water, um, they've got the road use tax fund. So they... they're... they're the largest department and they have some of the more significant This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 19 operations that they manage from a dollar perspective. Um, then Transportation and Resource Management, uh, is up there. Finance, we have a 16%, that's primarily because of the insurance programs. Then Neighborhood and Services Development are ... are some of the larger departments and where those dollars are going. Um, there's also then some transfer schedules and other numerical schedules (mumbled) the dollars of summaries of what's going in and out of each of those funds. And uh... after those schedules then there is ... what Kingsley as ... talked about was the FTE summary, and this is just the total City numbers. Um, it breaks it down by ... most everything in the book, by department, and then by division. Uh, we don't go any ... into any other smaller like by activity. (mumbled) later on it has that activity. Um, and then the ... bottom of that on page 97 are the totals, and then a graph, uh, presentation of the City's FTE account. Throgmorton/ Uh, Dennis, I ... I don't have the right glasses on to read this, uh, text carefully, but what's the total number of full time City employees ... at the moment? Bockenstedt/ We present ... we present an FTE in the budgeted, uh, as 598.93, but those are full time equivalent, so permanent part-time staff are on a pro -rated basis in that schedule. Throgmorton/ Right. Bockenstedt/ So if somebody works three-quarter time or 30 hours a week, they're .75. So when you add up all the full times and permanent part times, they would amount to 598.93 at full time equivalence. Throgmorton/ Thanks. Bockenstedt/ The temporary staff are not included in those totals. That pretty much doubles the City employment. We've got 600 FTE of full time, permanent, part-time but then we have about another 600 temporary staff in the rec programs, streets, and all the other programs (coughing, unable to hear speaker) library, so forth. Markus/ We're actually afflicted by the same thing the private sector is, you know, in terms of unemployment. Iowa City's unemployment rate's about, what 2 'h% now and so ... we go out to look for employees, that's a, you know, that's the same challenge we will run into. The other thing is, when you do FTEs, we're looking at benefit packages that apply even if you're less than a 40 -hour, uh, per hour worker. So ... those things all roll into the cost of what we're doing here for FTEs, as well. (several talking) Thomas/ ...compare to other ... there must be, you must make comparisons in terms of comparable cities of size and complexity. Bockenstedt/ There are, you know, there's... there's greater difficulty in doing certain comparatives. Uh, for instance, um... Markus/ First off we have no comparable. (laughter) This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 20 Bockenstedt/ He's somewhat right about that (several talking and laughing) I mean, um, cause I've worked for ... four cities now and the level of programming and services offered varies greatly. Um... Markus/ Yes. If you go into that budget message, we ... we deliberately do that kind of analysis and compare, but you go to other places, you know, Dubuque's running a casino. Other places have their own power facilities. Um, other places have other sources of revenue that they use, other functions. We have an Airport. We have full-time, uh, fire. We're the only one in Johnson County with full-time fire! Um ... we have a landfill that we serve the entire county with. So you go out and you check those types of things against others. Uh, for example our police department. You know, you might hear a police officer complain that, you know, ours doesn't match the FBI number. Well, how many are in a university town where the university has their own police department and in fact how many of the residents, when you county our census, are actually students? Right? So, maybe you have to diminish that number before you do an analyzed account then. So ... like all of these surveys that survey how wonderful we are, you have to drill down into what they're actually measuring. Thomas/ Oh yeah, yeah! Markus/ That gets to be really difficult. I can show you all sorts of analysis that say different things, and then when you start to drill down on those, it's a very specific analysis that probably leaves out a lot of the information that we would want on some sort of comparable analysis. We try to do that for you in this document, under Comparisons, but ... it's pretty tricky to do. Bockenstedt/ And ... and when you look at the accounting structure and the operations can vary greatly, um, some ... cities may have the water department part of the general fund. Or they have water and sewer all combined into one fund. Markus/ Or they have garbage and it's privatized. Bockenstedt/ Right. Markus/ And they get a separate bill. It doesn't come through their taxes. Bockenstedt/ So ... so it ... a lot of times those comparatives, you really gotta get into it and even figure that maybe a step further because you know there's a lot of companies you can hire that will come in and do an analysis on positions, job positions. There's a lot of times that you get into those job positions themselves, from one city to another, are vastly different. You know, a building inspector in one city might do nuisance enforcement and building code enforcement. Another city it may be two separate positions. So ... you know, when you look at that, you have to look at the different operations, how they're structured, and then what services are being performed and who's performing them. While our code enforcement may be in the building department, they may be in the fire department. And so those comparatives often times, you know, people like to look at'em This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 21 but they...they can really be apples and oranges pretty frequently, without getting in there and really looking at what you're... you're looking for. Markus/ I think as valuable a question is what's the perspective of the person that's doing the comparison to begin with, because if there's a special interest involved, they're going to take and analyze the data that favors their position, and you just have to keep that in mind. You have to ... you have to be pretty critical about judging what that analysis really is measuring. Thomas/ Well I ... I mean I would say that I'm ... I would be interested, because I know there's a lot of emphasis on our tax rate versus other municipalities within Johnson County that we ... yes, we may pay a higher tax rate, but we may be getting ... we, I'm assuming we're getting something for that additional tax. So to really articulate that to the public so they understand what their taxes are going towards. Markus/ If you look in the budget message, the message itself goes into that type of analysis, John, and I've tried to point those things out because that's something I saw immediately upon starting with this community is that our tax rate is significantly higher, but I can tell you where a big part of that is — it's in full-time fire service! And that's why quite frankly I've made a huge argument, Geoff is gonna shudder, about proportionality and what ... and who pays what in this county, and if you start to look at those numbers, they should bother you, okay? Because quite frankly, I'll give you an example! Mutual aid, okay? We're sending full-time fire. They're sending in ... in the best of cases, hybrid departments where you have both — some full-time and majority being volunteer. So ... you know, is that the right trade-off`? Some of our firefighters are volunteers in other departments. So you get into those kinds of...you know, analytics. The ... the reality is that some of the departments probably feel like they can stay volunteer because we are full-time, and they are a part of our ... our package, you know? That's maybe not an inequitable situation, and people may feel like they want full-time and that's a better service, but when you look at the rating agencies, again that critical comparison information, they're rated as high as we are ... for fire service. So ... all of that stuff comes into play. I can tell you, we take general fund money and we contributed to the Airport. Well, what's the reason for having an airport? I argue that part of it is for economic, you know, benefit to businesses that need an airport. Well, it doesn't stop at the border, does it? Okay! There's businesses in Coralville, North Liberty, and parts of Johnson County that benefit from that, but they aren't contributing anything from their general fund back to that airport. Well you can say, well, but you own it. That's ... you know, that's the glory of owning it (several talking and laughing) And I can take you, you know, it was a great deal. Everybody thought the ... the landfill was this great cash cow, right? Well, what happened when that cash cow turned, you now, got cookin', you know? It was our department that responded to all that. We were on the, you know, on the ... on the frying pan to get the information out there, to communicate all those issues. All I'm saying is ... you know, you're the core community. You're the ... you're the city in the metropolitan area of Johnson County. And so ... you know, having been in suburbs before, the ... the relationship kind of goes that way, and so I think that you, once you get into these numbers, you start thinking about these numbers, I'm sure you will come to the same conclusions I have that you need to be This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 22 arguing for the position of the City, provide a lot of services that we don't just benefit from — the metropolitan area benefits from, and so there's an equity issue in my opinion as to who's paying for those things. Mims/ The only other thing I would add, cause we're ... kind of start on this with FTEs, is that since Tom came five years ago, through almost entirely attrition, we have cut the permanent FTE by 40 (both talking) Markus/ 40. Mims/ ...yeah, 40...40 -plus positions, and so I think that was, you know, really a case of an exceptionally qualified, experienced individual coming in with a fresh set of eyes to the city and saying ... wait a minute, you guys gotta a little fat here and then plus also the cross -training that they have done with some of the reorganization of departments has allowed, as people have retired, and for me personally, and I think for the whole staff and ... and Council, one of the most positive things out of that is, I believe, that all but one position has been through attrition. So... Markus/ Uh... granted not everybody's happy about that. (several talking) And you've heard about that, cause I know (mumbled) some of you told me that. So ... I would argue that I have a lot more confidence in the ability of employees than a lot of others might have. I think having gone through the experience of multiple recessions in the State of Michigan before 2008 happened, I found that employees, when given the opportunity, actually do rise to the occasion. Actually figure things out maybe more efficiently, maybe more productively, and the other thing I'll tell you is ... it's been my experience despite the deployment of a lot of technology into organizations, it's not resulted in the refinement of the personnel aspects of it. I understand that jobs are important in all off those things, but at the end of the day, you know, you ...you have an obligation, I think, to the taxpayer, to the community, to be doing things as efficiently as you can. I don't wish to overburden an employee and I've ... if I felt that they were, I'd figure out ways to alter that work load so that that didn't happen, just like we went about this through attrition. I thought that was the more, urn ... I don't like to say humane, but ... you know... Mims/ Compassionate, fair! Markus/ Yeah, I guess the more compassionate way to deal with that kind of an adjustment in the (mumbled) We're to a level where I don't see a whole lot more of that being possible, okay? And the other thing that's happening at the same time is your community's growing, okay? So that then demand is growing on the operation. Every time, you know, when ... when 1 came here, let me tell you what I was faced with. With a brand new fire station, okay? A fire station isn't the issue! It's the employment at the fire station (laughs) that gets to be the ongoing issue, and so we had to figure out how to pay for that, because they had put a 2% utility tax (several talking) and then they ratcheted back to 1 %. Just before I got here. And then they cut the tax rate. I'm going, well, thanks a lot, folks! (laughter and several talking) So we figured it out, okay, and ... and as you go forward, if you have these kinds of open conversations at this table, there's a balance This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 23 between employment, services, and what you think is a fair amount to be charging, you now, for those services — either in taxes or fees, however you do that, but you gotta have that conversation. You know, and ... and the more you have that conversation, the better you'll understand it and the better you'll be able to defend what decisions you're making (both talking) Cole/ Yeah, well one of the things that ... one of the things that I saw looking at the budget, for example, obviously with police officers or fire, I think we can sort of have an opinion on that, but when looked at for example like water main replacement (laughs) uh, that just ended up being one of these things where we sort of just have to say, um, okay, we need that, and of course that's critical infrastructure and we want to support that. Um ... but what tools could we use to sort of make our own assessment as to that sort of critical infrastructure? I mean, I ... have utmost confidence of our staff to do that, and part of our jol... role is to supervise, so any suggestions on that (both talking) more technical... Markus/ (both talking) What you .... what your role is is to press me for that (both talking) Cole/ Okay. Markus/ ...for you to have to do that yourself. Cole/ So we'll do that on Saturday. Markus/ Yeah, and ... and you can ... you can ask the staff about how do we come to those numbers. Cole/ Yeah. Markus/ Some of it is somewhat historical, okay? Cole/ Yeah! Markus/ And... unfortunately you don't really get into this ... kind of microscopic view of operations until you hit bad times. At least that's been my experience as a manager. So you get to that point ... you know otherwise there's this kind of push -back constantly, well we've always done it, you know... Cole/ Yeah. Markus/ ...so that, you know, if it ain't broke don't fix it. Well, maybe you should break it so you can fix it. Um ... to see how that all plays out. So ... I think that there's comparative analysis, which we've tried to get to for ya, but a lot of times you gotta drill down and make sure that you're doing a good comparative analysis. That's not the easiest thing to do when you ... when you look at what others are doing compared to what you do in terms of their jobs and so forth, so... This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 24 Throgmorton/ If...if I could, I'd like to bring up, uh, another topic just to, uh, that has to do with drilling down, and (mumbled) just kind of introduced this more as a question and then as, uh, an expression of puzzlement. It has to do with the 2.2% unemployment rate, which I take to be a very good thing. And then I ask myself, how can we have a 2.2, uh, percent employment rate and over 20% poverty rate in our city, and with an FRL rate probably around 35% or thereabouts in the ... in the.....for schools located in our city. And I, the only explanation I personally can come up with is that that has to do with wages in the service sector. Markus/ It does. Throgmorton/ Yeah. But ... but then...it's really a matter of puzzlement for me, you know, what drilling down, what... Cole/ (both talking) ...include the people actively seeking employment (both talking) Markus/ And some drop off. Cole/ Yeah. Markus/ But... Cole/ (mumbled) Markus/ Can you imagine if we're recording a 2.2% unemployment rate and the people that have dropped off, it's still just ... it's way below what any, you know, other parts of the country (several talking) Cole/ ...be proud of. Markus/ And then there's the challenge too ... when you have, when you're out trying to do economic development, you know, the businesses are looking at those numbers too and saying, well, if you already have that good unemployment rate, how do we get people? So that's why the ICAD is shifted more toward job development and skilled development, teaching kids code, you know, trying to ... trying to teach for jobs that fill what it appears to be the need, uh, in those ... in those ... in the industry or, uh, whatever is hiring, whatever employer's trying to hire, so ... I mean I think ICAD recognizes that that's a big issue for us, that we don't have the ... some of the skill sets that we need to fill those positions, but... then when you're trying to fill an office park, or you know, redevelop Rivercrossings and have those types of things, we're trying to either grow our businesses internally. The other thing too, I would say, Jim, is that a lot of these businesses are downsizing themselves. They're becoming more efficient in how they operate, so ... all of that sort of decision-making going forward, you ... you have to consider all those things. Bockenstedt/ And I think some of these, uh, economic information indicators you need to look at, and ta... remember that a large part of our population are students. So I know when This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 25 some of our per capita income are very low, but I think that large student population brings down a lot of...(mumbled) lot of 'em go to school and they work part-time. So when you look at their income levels, they're significantly lower than maybe a standard ... you know, full-time or two full-time family income, because we have a lot of people of that nature, and so I know when we look at it we talked to Moody's about that, because that's one of the indicators that they looked at and I think that was brought up at another meeting is, you know, most of that has to do with the student population brings down some of those economic indicators because they don't make .... that same level income as a ... as a full-time person does in the work place. Cole/ Well we have the ability to separate student from non -student indicators, correct, or not? Bockenstedt/ Not that I'm aware. (several talking) Cole/ Okay. Markus/ That ... that was the point that Malar made, remember the (both talking) Mims/ Yep! Markus/ ...gentleman that came in and did the study. One of the things that he talked about is you really have this kind of undisclosed level of income because ... just because the students' actual income shows up one way (coughing, difficult to hear speaker) students are still in that transitional support phase from their family, and so he would make the argument that those numbers are wholly, you know, under -represented in terms of that student population and ... therefore you'd need to include that in your marketing data as you go out and try to recruit business or the Downtown District goes out and tries ... and they use some of that same argument when they're out trying to show a business that, you know, just because these demographics show up less than West Des Moines, for example, um, where you don't have a student population. That's the ... that's the point Dennis making — Moody's will always comment that we're not the traditional socio-economic that ... that a West Des Moines is and ... and ... and the only point there is is that we believe that that's largely the result of the student numbers, income numbers, showing up rather than, you know, a family that's permanently located and earning substantial incomes. That shows up in their demographics as opposed to ours. Sometimes that gets misinterpreted as to what we're saying. That's the (both talking) Mims/ The other thing I would say reference to your comment, Jim, about, you know, the difference between such a low unemployment rate, but having the higher, you know, property rates and FRLs, I think Dennis made a huge point with the high percentage of students we have, you know, as a university community. But along with that, because we are such an attractive place for so many people to live, we have a lot of highly educated people that are underemployed, and so they basically push the lower skilled people ... out of the job market, or to even lower paying and lower skilled jobs, you know, when you've got Ph.D.s being baristas and, you know, and different things like that, you know, those people of lesser skills either can't find jobs or they're forced into even lower and lower This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 26 paying jobs, which ... is all related, I think, to being a university community (several talking) Throgmorton/ We're incomparable, I guess (laughter and several talking) Markus/ Let me just make one other point. So when you start talking about affordable housing, affordable housing should be close to employment centers, should be close to services, right? So, I think when you start doing the GIS, what we need to be looking at is where are those service positions that are paying less? And what jurisdictions they're in (several talking and laughing) Yeah! And how do we get those individuals to also support the concept of affordable housing. That's why we went to inclusionary zoning for the Riverfront Crossing was to show that we are committed to that and that we're trying to do those things, but I would say to you ... that there's other major centers of service jobs that quite frankly should be focusing on building affordable housing close to them for the, I mean, that's what those jobs end up being is ... those types of positions. Thomas/ We're running public transportation to provide better access. Throgmorton/ Yeah. All good points. Botchway/ I had another question, um ... kind of around the discussion that we're having is, basically do we have a plan, you know, at the risk of asking the question as we go through each department tomorrow ... or not tomorrow, but when we have the discussion with each department (both talking) Markus/ Saturday. Botchway/ ...Saturday, um, you know, what is our plan to recoup some of that money? And we've had these conversations before, Tom, I mean ... you know, I know the Senior Center Commission, or Senior Center's actually making some changes. Parks and Rec has obviously made some changes that were public. I mean, what other things are we doing from that front, from an Airport standpoint, to recruit some of those funds back. My other question was going to be around, you know, it's been some time but, you know, were we ever ... well, I know the Senior Center had a ... a reduce in funding from Johnson County ... what is our plan around... are we going to ask for that to, you know (both talking) Markus/ I think that's a great question, and quite frankly I know that you, uh, some of your Council Members have maybe some better relations with some of the Members of the County Board. I ... I would encourage you to use those better relations to extract a more equitable distribution of funds. Remember ... uh, when I started, we pointed out the discrepancy with the Animal Shelter, okay? Not only operationally, but then replacing the flood damaged structure, you know, the actual capital costs associated with that, and remember that led to a rather skewered City Manager as a result of the ... that request, okay? So, you know, those things don't come without ... you know, sometimes some pain, um, even with best of mediation skills. Um, that happens, okay, and I don't mind being This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 27 the front person on that, but the other thing I would say is I would always encourage the person with the best opportunity to succeed be the point person, and in some cases I think that's going to be Council Members to make that (both talking) Throgmorton/ Yeah, I'd like to say I think some of us do have, uh, very good relations with, uh, Supervisors and ... we need to do what we can. Markus/ Yeah, and I think... we'll... we'll try and inform you as the best we can. You may question our judgment as to what we see versus what you see. You have to be comfortable with that, that you feel that there's a real argument to be made, and I think you can do that. Um, but ... that takes...you to be well informed. We'll do our best to get you there with that kind ... with the kind of information that we have. You know, trying to get people to agree to the facts, right? And if you can get 'em to agree to the facts, you always have a better chance of reaching some sort of settlement. Bockenstedt/ Yeah, and I'll just, um, sorry, I'll just add ... it's really a fairly common problem, I mean, across the state, across the country, and it's that cost sharing and those, you know, usually the primary municipality seeking assistance and getting push -back from those that ... kind of for free or a reduced rate, not wanting to contribute more, and so it's a pretty common struggle. You can go community to community throughout the state for ... fire service, library service — you name it — airports, and it's a very common tug of war, um, that you can find different results across the state. Throgmorton/ Right. Okay, Dennis, what else do we have (both talking) Bockenstedt/ Yep (mumbled) get through the rest of this. I think we covered really the ... the meat and potatoes with most everything. Uh, in the general fund section, this has a, uh, a narrative like the other fund sections. Uh, it's significantly longer. Um, on page 101 is where that starts. On 102 it kind of has that, uh, chart of the revenues that support the general fund and you can see on page 102 there that property taxes make up about two- thirds of the funding, uh, for the general fund. Um, and I'll just skip ahead to, uh, down to page... Botchway/ While you're doing that, where is the emergency fund? Bockenstedt/ Emergency fund is more or less our reservation of the general fund. Botchway/ Okay. Bockenstedt/ And, um, you'll see that across a lot of funds. They'll say there's reserves or ... reserves restricted assigned fund balances, and that is ... a lot of times we'll do that, like in the general funding would be for the emergency fund. There's also about another dozen things that funds are being reserved or assigned for. Um, we also do that for replacement reserves. So if money is being set aside for replacement of something, like in the landfill, or closure, that's not shown in the bottom line fund balances. It's shown as being assigned because you know maybe that ... those funds are being held ... and that's This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 28 required, one of those required by law. Some of 'em are by law. Some are through contracts, through covenants, and some are through policy directives, such as the emergency fund, and so there's various levels of restrictions based on those dollars and ... and so you really, we ... we pull those out and then show you where that ... the bottom line is for more or less your operating fund balance, and that is so that you can see whether those doc... dollars are available to spend or to cover the cost of operations, or you know we're setting that aside cause some day we'll have to close a cell at the landfill and we're gonna need the money in the bank. Like I said, that's one that's required by law. Some not so much, but the emergency fund is part of that assigned, restricted reserved fund balance in the general fund. Throgmorton/ Tom, in this context, maybe you'd like to say something about the, uh, the ... the fund set ... set aside funds having to do with replacing any ... backfill funds that don't really come to us from the State (both talking) Markus/ Yeah, and that's ... and that's what Dennis came up with this idea for this emergency fund, uh, primarily it was for that, but for other reasons too, unfunded, um, OPEB it's called — other post employment benefits, and believe it or not, despite the fact that we don't provide, um, insurance in retirement per se, um, we have an OPEB liability that's shown actuarially every year and so you can get into pension liabilities if they miss ... if they miss a, uh, an adjustment in the stock market and they didn't do that well, it'd roll up a pretty sizable impact in terms of your unfunded accrued liability in terms of your pension contributions every year. We'll show you this ... that on Saturday, as well, so I would just say, um ... that emergency fund, the idea was initially to create more of a soft landing. If they pulled back on the ... on the backfill, um, which as Dennis will tell you from his previous employment here in the State, they have some history of stopping the backfill, right? And ... and that is a likely occurrence based on what I'm seeing in terms of the revenue projections for the State. Maybe not this year, but I would guess within two to three years you're going to see, maybe not a full pull-back but maybe a ratcheting down. They'll try and create their own kind of soft landing, but we're trying to put ourselves in the best position. Now, you know, people can attack the amount of your ... your fund balances and they can criticize the emergency fund, but what they can't criticize is that you're a triple-A rated community, and one of the things that contributes to that is healthy reserves in fund balances, and so you're then getting the dividend on the back side by paying a lot less when you go out to ... to take loans and have to issue that debt. It's going ... it's going to be reduced cost to the community. So, there's good reason for us to hold, you know, and we have policy as to what those balances should be and when they get too generous, he ... Dennis has actually figured out a way to carve it off and put it in this emergency fund for the other things that happen. I mean ... you know, who would have predicted a fire at the landfill? You know, you may need to grab some money out of (mumbled) the general fund, for example, to use it to ... to, you know, to take care of that, and eventually getting paid back from the fees over a period of time. Those things happen! Tornado comes through here, um, a flood hits us again. Those things will all happen here, right? So ... it makes sense to protect yourself in that regard and I think more and more cities have to protect themselves, and I don't think they should ... they can or, uh, necessarily should be too dependent on the State and the feds. I mean, look at the This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 29 number of natural disasters that the feds have had. They're to the point where I think they started to pull back funding. They started to pull back FEMA funding here at the University to some degree, so ... all of those things I think play into why we're ... we're trying to be somewhat conservative and cautious about the money side. That doesn't mean ... you can't go into programs that you want to go into. What I would say to you is, make sure they're well-defined, ask us for fiscal notes on'em to show you where we're going to pay for it from, just don't go down those paths without... getting the assurance from the staff that we have figured out where the money's coming from, here's how those things will work, and you tell us what you want to accomplish by taking on a particular program so that we can measure. Dickens/ I just have a quick question on the next one on four, the ... the hotel tax. Are we obligated to pay 25% of the Convention and Visitors Bureau? Is that (both talking) Bockenstedt/ That's by Council resolution. Dickens/ That can be changed? Markus/ Yes it can. Mims/ And ... I guess just maybe for a future point of reference and for new Council Members, not all the other communities are paying all their hotel/motel tax in as ... defined by the original agreements for the CVB, so... Markus/ And I think the prime example is the ... in the case of the CVB, Coralville I think actually owns the property and ... that the CVB is located in, and so they get an in-kind contribution from the provision of the space, and I think more recently the CIP to upgrade the space. So there's always been that kind of a ... a strong connection. Now we use that as a model, by the way, for the ICAD situation to lower our contribution, maybe not dollar -for -dollar, but a sizable reduction, and then a lower rate for them to be here because we really see the benefits of having that kind of operation in our downtown core, interacting with the University, getting them here, creating new jobs, and then hopefully spinning those jobs off to some place in our community, like Riverfront Crossings (mumbled) Bockenstedt/ And I'll just point out one other thing in the general fund, uh, summary, the narrative on page 108. Uh, there's a chart there on the expenditure side. You know there was the one on how things are funded, and on the expenditure side, you can see that, um, where it's being spent that 73% of the general fund expenditures are for personal services. So, you know, you've got a third of that money coming from property taxes, or two- thirds of the money from property taxes. A lot of that goes to pay salaries and wages... directly. Um, the rest of the general fund, you know, there's the numerical summary, is ... is really structured like the rest of the funds. You've got your narrative. You got your fund summary. Um, there is a breakdown on all the restricted funds (mumbled) 112 of what's been assigned, and you can see there's a whole list of 'ern there, from library escrows to parkland development. Um, this is different because there is This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 30 more breakdown on revenues, but then also gets into each division, uh, like the City Council's one is on page 115, where it just has a summary of that division and then the breakdown of...of the dollars for that division or the activities within that division. Um, so that's (mumbled) the general fund that's really... you... you can go through that, but really that breakdown by department, by division (mumbled) the structure for all of the funds and all the departments in the book. Um... Botchway/ Two quick questions, kind of back to Terry's question. Do we receive any type of analysis of the proportionate funding that we provide from a hotel/motel tax standpoint, compared to other municipalities? Markus/ It's all available. If you want it, we can do a report for that. Botchway/ Okay. Um, the second question being where is the affordable housing fund we talked about? Is that within the (both talking) Bockenstedt/ That's a ... that's a new fund and there's really no activity in it yet. There's no revenues have been received, um, there's been no real programming (several talking) Markus/ ...you have a million coming from the (both talking) Bockenstedt/ When the sale of (mumbled) takes place this spring, that'll be the real first influx of revenue coming into that fund. Um, I think we've actually assigned a number to it, but with no activity and no programming, there's really nothing to report at this ... this point, so.... Markus/ And recall we just gave them an extension too. Bockenstedt/ Yeah, so when that money would come in, we'd probably more than likely, uh, go into this summer, this fall, and do a budget amendment for those dollars and (mumbled) for that programming. Markus/ And we'll have to have some discussion (mumbled) Council wants to, uh, how you would go about appropriating those funds. (several talking) Bockenstedt/ Um, I'm going to skip down to the, that service section here, and I just want to show you, um, a little bit about this ... the debt service fund. Um, even though this is one of the smaller funds, it's really the repayment of that debt service, but there's a lot of information in a small little section of the book here, uh, starting on page 345. Um, like all the funds it includes a narrative, um, it shows our, uh... debt schedule, cumulative GO bond, revenue bond, that schedule. And then there's the narrative about, um, you know, the ... the debt amendment, uh, our outstanding bond indebtedness, uh, the history of our... our... our debt, versus assessed valuations. Um, and something we've put in here when you....um, I'll skip down to page 350, um, it has a list of all the outstanding bond issues, uh, and we've only got like 10 outstanding bond issues. So it's a very low number of outstanding bond issues. It shows the ... this is on page, uh, 350, it shows, uh, the This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 31 amount outstanding and the ... the, uh, payments on those for the next three years, but something new that we ... we went through and added. For each bond issue, it has the breakdown of the schedule, but then shows what that bond was issued for. So for instance I've got a ... on page 352 here is the 2009 bond issue and it shows all the projects that were funded with that bond. So it shows you the interest rates we're paying on it, the schedule on that bond, and then all the projects that were funded with that bond, and so we've got that for each of those ... each of the outstanding issues, um, and if you go to the water and sewer funds, we have that for the water and sewer revenue bonds, as well. Cole/ So it's showing $49 million of outstanding debt, that's total amount the City of Iowa City (both talking) Bockenstedt/ ...general obligation debt. Cole/ Okay. Bockenstedt/ There's also additional, uh, not quite that number outstanding for water and sewer revenue debt, as well. And that would be reported in the water and sewer funds. Cole/ I don't know historically whether we've done this, but when we have a routine Council meetings and we're asked to pass upon something that may incur additional debt, do we then... obviously there's that individual expenditure, but (mumbled) indicate how much it's going to add to the total amount of the debt, I mean in terms of the ... do we have the total debt number available to us? Bockenstedt/ The way that, yeah, the way (both talking) Cole/ ...at the end of the afternoon (both talking) Bockenstedt/ Yeah, the way the ... the process works is you have the capital improvement program and ... and I'll just briefly touch on that section of the book. And in that program it lays all the projects that are being funded, and it lays how much of that is being funded from bonding. Revenue and general obligation bonding. When the budget is adopted by the City Council, that spring following the adoption of the budget, we actually issue that debt. So we'll take that project schedule of what you see is being funded by bonds and go issue that debt that spring. Now ... those projects later on down the road ... translate into you'll see stuff coming from Public Works and Engineering saying we're doing a letting on a contract; it's being funded from general obligation bonds; you know, and ... and that's when you really get into the nuts and bolts of, okay, we're approving the specs for a project for, you know, approving bids, accepting that project — all of that translates back to ... the CIP program as part of the budget that you had approved. So it's just a ... you know, sometimes it's easy to get lost and this is one of the real challenges is, you go through the budget and you approve projects, you approve these activities, and then ... you do that so far in advance that six months, one year, two years later you're seeing the more specific Council actions for the actual projects and contracts, and really where the rubber This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 32 hits the road. But translating that activity back to that original budget activity sometimes is difficult to ... to keep making those connections. Does that, uh, answer your question? Cole/ Yeah (mumbled) Bockenstedt/ Okay. Mims/ The other comment I would make on the debt, I think we've got some really good policies to make sure in terms of the amount of our debt levy and other things that we keep a pretty strong financial situation so we can maintain our Moody's triple-A, but also Dennis and his staff are really good at ... when he was flipping through here, if you saw some of the interest rates on a couple of those bonds, um, my guess is we've got a couple in the next year or two, and I think maybe there was some stuff in the budget document of, um ... you know (mumbled) refinancing those, but they're callable and you would basically pay those off and issue new bonds to get lower interest rates, so .... I mean, I know interest rates are going... creeping up some, but we've got some that are in the 3 and 4% that I would assume might be... Bockenstedt/ In the last couple years we've been pretty good to us! Mims/ Yeah! (laughs) Bockenstedt/ So ... um, and then I'll skip down. I'll just touch since there is a meeting on the capital improvement program, uh, a week from today, uh, in section, uh, there's a capital improvement program section, it's on page, um ... see if I can read that page number. (several talking) 483, and so there's a narrative, um, but also then it kind of gets into ... the fund portion of it and then summaries. Um, you know, just by department, by funding sources. There's a chart as far as ... by division, and you'll see more of this next week. There's a list of projects in there and then ... um, like here's where you ... here's a chart on page 492 of the funding sources, and this is kind of one of those things you were asking about, and so when we throw all the project requests into the hopper, and look at 'em all, analyze 'em by needs, um, you know, timing with what's going on in the community, such as like the, uh, Hancher Auditorium and then you ... you match up ... those funds and then so for the bonds we may have so much that we want to issue to stay within our policy framework or within what we think Moody's, as far as their statistics are concerned. So, if we can say, well, we can issue $8 million of bonds and we won't have to raise property tax rates. We think we'll keep our debt ratios low. Then we look at the projects and prioritize and base ... that's how things get shuffled and ... so it's a matter of balancing those priorities with the dollars available. And that's where like the new gas tax should help out with some of those street priorities. Um, and then at the end of this ... list, I think this was mentioned earlier ... on page 581 is the ... there's a list of unfunded projects. And so there's a ... this list of all the projects that are kind of sitting out there that weren't being funded in this five-year program and ... and, you know, as we do this each year, some of those projects may come on the list or come off the list, uh, where our new ones will come about and maybe before they make the program they'll come onto this unfunded list. And for that five-year CIP, that first year that CIP is then amended into the This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 33 operating budget and certified with the State of Iowa. Um, the internal service funds, I've talked about the statistical section. This is really the kind that goes ... I would say off the, uh... the whole fund — department, activity, structure — because this really is just, uh, a conglomeration of different information about the City. You know ... uh... its tax rates, uh, census information. On page, uh... if I can read that number ... 628 there's a 10 -year history of property tax values. And ... urn ... it has the, uh, rollback factors over that 10 -year period. There's also, uh, summaries on largest taxpayers. Um ... (mumbled) largest water and sewer users. (unable to hear person speaking in background) As far as .... well they have their own water system. So that's... that's why. So there's a lot of different information in this statistical section and also .... it can, uh, here's, uh, one on page like, uh, 640...639, 640. Actually it'll start on page 638. Each department... this is kind of why I call you statistic junkies, in that we have the performance measures that we link to the strategic plan which is part of the budget document. You know, in those divisional activity pages, in the back here there's a lot of departments that we have a lot of statistics. A lot of departments gather a lot of statistics for their organizations they belong to, or the Police department does for the FBI. Library does for the State Library Association, etc. We get those statistics and we compile 'ern back here so that, you know, if you look at the Transit system, their performance measures... because the strategic plan you might have three or four key measures, but if you want to see a whole bunch of statistical information about the Transit system, you come back to this section and there's a maybe five or six pages of just a lots of numbers, lots of statistics, and so you can get a lot more information about departments or divisions in ... in a much more numerical intensive, uh, I guess presentation. Throgmorton/ On this point, Dennis, uh, one of the topics that Tom and I discussed in one of our recent meetings had to do with... basically with indicators, uh, and it had to do with the fact that there are so many indicators out there that it's very easy to kind of get lost, uh, because... simply because there's so many of 'ern and it might be very helpful for us to have, um, a pretty concise set of really key indicators that we believe ... best reflect how the city is doing. I don't mean City government. I mean the city, and the people in the city. Uh, and, uh.... maybe y'all could think about that a little bit and try to identify what ... what you believe are those kinds of key indicators and then (both talking) Markus/ Yeah, in the business side they call 'em leading indicators (both talking) You see 'em all the time, that, you know, there's probably some social justice leading indicators, probably some, uh, environmental leading indicators. There's clearly fiscal leading indicators. Throgmorton/ Right. Markus/ Um, all of those things make up what, you know, you kind of look at from a ... a, what do they call those, a windshield report or whatever (mumbled) at any given year and how that's changing from year to year. Cole/ I'm curious about the concept of matching. I think one of the things I really liked that previous Councils have done is matching, for example, 1105 project where there was a This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 34 funding component and then essentially if they would raise the City would match. Was that a departure, um, from typical practice, or is that frequently done because I think frankly that funding model's appealing to me, to give people incentive to raise some of their own funds to match for City funds. Is that ... how frequently is that done? Markus/ That was, uh, my doing. Cole/ Oh, okay! (laughter) Kudos to Tom! (several talking) Markus/ I'll share in those things. I was invited over for a discussion. Cole/ Yeah. Markus/ And so ... the way we went about that was ... we knew we needed a certain amount (mumbled) Cole/ Yeah. Markus/ ...and they had really kind of tapped a lot of their market share already, so ... we looked at it. We kind of split (mumbled; noises in background) we said we'll raise this, but the thing that a lot of people don't realize is that our commit was spread, okay, so our commitment was spread over five years. So we're making $20,000 commitment, you know, every year for that five-year period, which is a lot easier for a budget to swallow, you know, (mumbled) operations and it actually challenged some of the other donors to step up and do that. You know, that ... that was really a Johnson County project... Cole/ Yeah! Markus/ ...so we didn't step out there (both talking) Cole/ ...too much... Markus/ ...too far and you know ... get it into that, but yeah, I think there's all sorts of scenarios and opportunities to help organizations, but again, to me ... it's one of the ... one of the things that I saw is really attractive about that is they were taking non -profits and combining them under one roof (mumbled) starting to share. One of the things I'll tell you, if you look around the country, there's at times a proliferations of...non-profits all competing doing the same types of things... Cole/ Yep! Markus/ ...and so when I saw them moving together, to consolidate what they were doing, that's something they should be encouraged... in my, in the way I (both talking) Cole/ Well it's also appealing for us too is that we're not adding more City staff necessarily (both talking) This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 35 Markus/ Absolutely! Cole/ But we are getting more social justice components, so I think that's a model that I'd really like us to look at. Markus/ (both talking) ...model that I think we have supported and would continue to support. agree for a lot of the same reasons... Cole/ Okay. Markus/ ...and there again, you can get into defining the scope for the contribution. And then having that scope be the ... the item of measurement as to how successful they are with that, and I think that's the way when you make those contributions, you should have a contract with a non-profit as to how you wish to accomplish those things. Bockenstedt/ And the only thing I'll mention about the statistics is, on the last page of that quick reference that was distributed, there is .... I'd .... (mumbled) put a bunch of indicators or numbers in the back of that that I think are pretty common questions that most people get. What is the property tax rate? How much outstanding debt do we have? What's our valuations? So that, you know, how ... what's the City's operating expenditure budget? So you can look at that, you know, lot of times (mumbled) (laughter) It's hard to find it in there. You can look at it and say, well, the City's property tax rate is this, expenditure - budget's this, and so...just so those commonly asked for numbers -are easily available. It's on that last page of that handout. Throgmorton/ This is partly why I made the comment I did about indicators. Uh, I think it's really crucial to have the kind of information you just pointed to, just described, uh, at the end of that short document. But in ... in the end, the ... the key question is how's the City as a whole doing? How are the people of the City as a whole doing? So what are the indicators about that? In other words, what's the relationship between the budget and how we're doing? So, I ... I'd ... I think it'd be helpful to have a few of those kinds of key indicators... Markus/ We've noted it. Throgmorton/ ...concisely indicated. Markus/ And if I get your sense, your sense is maybe the (mumbled) above, below the poverty rate; uh... there's all sorts of established indicators that if you just put 'em in the same page, as to our community, you could then start to see from year to year what's (mumbled) Throgmorton/ Right. This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 36 Markus/ And you could add, subtract those indicators. So those indicators exist already, just you know orienting it to this kind of thought process. Thomas/ I think the only comment I would have on that is with the indicators is ... you have an indicator such as, you know, we were looking at these taxable valuations and it's ... I think the average was 6.4% or something like that, and that's citywide. So what I would be interested in is that ... the way, again, that there's ... Iowa City's a complex place. I mean there may be some places where the valuations have gone up 12% and other parts of Iowa City where they've been flat for the last five years. So I'm ... I'm interested in understanding, okay, we ... for the purposes of this report, you do the overall.... because you want to see what the ... the difference, you know, how much has the valuation gone up in aggregate, but I would be interested too in understanding, you know, there ... there are different degrees of, uh, livability of, vitality, as you look at Iowa City in a more complex manner, and ... trying to identify variables, indicators, which would help us understand, you know, where ... where the indicators aren't performing as well as we would like them to. Markus/ John, I would tell you that just like police statistics (clears throat) excuse me! Just like police statistics, you could take a particular neighborhood and it would show, uh, certain police statistics. But if you took out .... two blocks, that would move that average to the normal. So sometimes if...it's how we select our geographic boundaries (both talking) Thomas/ Sure, yeah, it's going (both talking) Markus/ ...it's going to have the same thing. You have to keep drilling as to what's causing that huge variance, you know and the numbers you're seeing in terms of...of those types of things. And I ... I can show you that cause we went through that whole issue with ... with St. Ambrose and ... it became very clear was, you know, couple block area. Bockenstedt/ And we do have some ... defined geographic areas, the tax increment financing districts, and you can look at the property tax growth within those districts versus outside of those districts, is ... is pretty readily available, um, and I can tell you there was pretty significant growth in the City/University tax increment district, uh, this year. So I mean those ... those are, rather than trying ... I mean, you can create a district and look what's in there, but those TIF districts are already predefined and they're already available at the ... the, uh, City Assessor's Office and I know in that particular area there was significant valuation growth. If you pull that valuation growth out, it would really ... change the dynamic of their overall growth. Markus/ The problem with those, isn't that going to be that it's more commercial, industrial type versus residential? And I think what John's indicating is more a concern about if residential, how those differences are occurring across the community, cause that's more a measure of I think what you're looking for. Thomas/ I think maybe what I'm trying to say is, you know, we have an average. We could ... we could look at this in terms of averages. We could also look at it in terms of, you know, This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 37 median, you know, as ... as, I know there's been a lot of discussion on this at the national level, uh, Robert Reich I remember talking about, you know, if I walk into a bar and there's Kareem Abdul-Jabbar and myself, and you talk about the average height between the two of us, you know, I've increased in height by ... by two feet or something (laughs) so I mean it...it....median is fine if...if there actually is in fact, or average is fine, if there's 50% above and 50% below, but if you're seeing... Markus/ Outliers! Thomas/ Outliers, if you're seeing, you know, that ... that it isn't breaking even, it would be...at least useful to get a better understanding of what the median, uh, increase would be. Cole/ Well it's looking like too our ... our GIS staff I think is probably going to be busy because I think these maps I think are going to be very helpful, in terms of us getting the starting point, and then we may need to dig deep to sort of figure out differences. But I think the visualization for me would be helpful. (several talking) Bockenstedt/ I'll try and wrap up here! So then the last section is the, uh, appendix, uh, and for this particular, uh, budget book, really we just have the glossary in there. Like I said we really revamped this. It's pretty comprehensive, so it just talks about you know everything from bond terminology to accounting terminology, budget, um, so when you see words in the text or you hear this jargon, particular to governmental accounting or budgeting, you can look up those words and see what, you know, what they mean or what's behind'em, so, um, and that' pretty much ... oh yeah, I do have some handouts from that quick reference if anybody wants (several talking) Markus/ So Saturday, um, is a long session and partly why we consolidate on Saturday is for context, because if you were to spread it out over a hour or two-hour meetings, you'd probably find that you forgot what we started with, and hopefully when you put it all together, you'll understand the context and the other thing I'll talk to you about in terms of context is ... that during the course of the year, you're going to get requests for funding for one thing or another. Try to set these ... these requests up so that they come in so that, quite frankly they're competing, okay, with the whole, so that you're making decisions because ... I always use the example (coughing, difficult to hear speaker) person that comes to your door to sell something, that's out of context cause that's the only thing that you're being faced with the decision to buy or not. So during the course of the year, all the stuff looks good, okay? I can make it all look good for ya. The problem is you have limited resources and you have almost unlimited demands for those resources. So the budget process is to help you put it into context, so that you're seeing these things at one time and you're making decisions as to ... my priority is here and this is where I want to spend the money versus ... so... Cole/ (mumbled) build that into the budgeting process though. We talked about the emergency fund. Do we have any discretionary fund from month-to-month basis as these funding requests, that we build that into ... itself into the budgeting process? This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016. Page 38 Markus/ Well I would tell you that departments, uh, and less so now probably than from before, you know, t hey used to have accounts that would roll from .... we started to drill down into those accounts and say what do you really need in here and we have the ability to move funds to amendments to the budget document, but we try to ... what we're trying to do is constantly refine (noises in background) accurate picture, and of course we have contingencies so you can spend out a contingency, but when you see that you're spending on a regular basis out of contingency, I would argue to you that budgeting has become less important and so ... you know, that's why I think the Saturday context is such an important thing and obviously, you know, especially for the new Members of Council, it takes a while for you just to get the acumen of what we're talking about before you can, you know, interject and ... and say, well, we can do this later on; we can fund this later on; I want to get this ... so you're going to have to share. You're going to have to be very candid about what you want to see accomplished so that we can kind of respond to you and how you go about getting that accomplished. Throgmorton/ All right! Thanks to everybody. I think we're probably finished. Anybody need to say anything else? Botchway/ Just appreciate it, Dennis! (several talking) Throgmorton/ Uh, so I'm going to declare this meeting adjourned! This represents only a reasonably accurate transcription of the Iowa City City Council budget work session of January 4, 2016.