HomeMy WebLinkAbout~Master - Special Meeting of the Ames City Council 02/04/2005MINUTES OF THE SPECIAL MEETING
OF THE AMES CITY COUNCIL
AMES, IOWA FEBRUARY 4, 2005
The Ames City Council met in special session at 2:00 p.m. on February 4, 2005, in the Council
Chambers of City Hall, 515 Clark Avenue, pursuant to law with Mayor Tedesco presiding and the
following Council members present: Cross, Goodman, Mahayni, and Vegge. Ex officio Member
Tugan was also present. Council Member Wirth arrived at 2:07 p.m. Council Member Goodhue
arrived at 2:46 p.m.
GRANT APPLICATION TO THE GOVERNOR’S TRAFFIC SAFETY BUREAU: Moved by
Mahayni, seconded by Cross, to authorize submission of a grant application to the Governor’s
Traffic Safety Bureau to support additional overtime traffic enforcement.
Vote on Motion: 6-0. Motion declared carried unanimously.
FY 2005/06 BUDGET OVERVIEW: City Manager Steve Schainker, Finance Director Duane
Pitcher, and Budget Officer Carol Collings were present to review the documents contained in
the budget packet distributed to the City Council.
Steve Schainker advised that three significant developments negatively affected this budget: (1)
The state-mandated Police/Fire Retirement System will increase the City’s contribution from
24.92% to 28.21%, effective July 1, 2005. This results in an additional $240,000 from property
tax revenues to fund this mandate in 2005/06. (2) The state-imposed rollback decreased the
percentage of assessed value on residential property that is subject to taxation from 48.46% to
47.96%. This decrease has resulted in $8,243,692 less in assessed value subject to taxation for
residential properties. (3) The rising cost of fuel has hit all departments, but the hardest hit is
CyRide, which will require a 10% increase ($92,555) in tax support from the City and an equal
percentage increase from Iowa State University.
Mr. Schainker explained that the moderate property tax rate increase being proposed was due
in part to: (1) health care cost containment; (2) refinancing one-time capital items in the revised
2004/05 Police, Fire, Parks and Recreation, and Library budgets rather than raising taxes to
support these expenditures in 2005/06; (3) General Fund monies have offset the 2004/05
obligation to the retirement plan for Police and Fire personnel.
No rate increase for the five major utilities is built into the 2005/06 budget. Mr. Schainker
reminded the City Council that rate increases will be required in the near future for electric,
sanitary sewer, and storm sewer utilities so that operating costs and projected capital
improvements can be supported by user fees. He explained that one of the most important
decisions that the City Council must make will involve how much to increase and when. Mr.
Schainker noted that the sooner a rate increase is established, the less of an increase will be
needed at a later date. To avoid placing a burden on the City’s customers from stacking rate
increases, Mr. Schainker advised that a rate increase in one of these three utilities in 2005/06
would be advisable.
Finance Director Duane Pitcher explained property tax levies for 2004/05, divided among the
City, Ames and Gilbert School Districts, Story County, and Des Moines Area Community
College. He explained that Ames again had the lowest general levy per $1,000 of valuation
among the top 12 cities in Iowa for FY 2004/05.
Mr. Pitcher stated that this budget represented a property tax rate increase of 2.28%, from $9.95
to $10.18 per $1,000 of taxable valuation. This $.23 change in the tax rate is estimated to cost
a residential property owner approximately 1.91% ($9.19), a commercial property owner
approximately 3.07% ($30.35), and an existing industrial property owner 2.28% ($22.72) more
in 2005/06 for each $100,000 of taxable valuation. He explained the tax levy breakdown. Sixty
percent (60%) of the Local Option Tax proceeds goes directly to property tax relief, and a graph
of the savings to property owners since 2001/02 was shown.
Mr. Pitcher described the dollar value and percentage of change in assessed and taxable values
for residential, commercial, and industrial properties. He talked about the use of bond proceeds
and how they affect the debt service levy. The currently outstanding and proposed debt service
issues were explained by Mr. Pitcher. Residential property will make up 48.16% of the taxable
value for FY 2005/06. Commercial property valuations formerly were higher than residential,
but have dropped to 46.45%. Mr. Pitcher summarized changes in the tax asking for 2005/06:
Revenues were up by $483,283, but expenses increased by $857,825 (3.9%). Changes in
expenses were explained. Two projects were being added: “Civics 101" and the Youth Police
Academy.
A three-year comparison of the cost of services per residence was given. In 2005/06, the
owner(s) of a $100,000 home in Ames will pay $488 for City services, which includes debt
service.
Road Use Tax revenues were also explained by Mr. Pitcher as were changes in employment
levels (FTE).
Fee changes for 2005/06 were reviewed. It is being proposed that a $20/check fee be imposed
for non-sufficient-fund checks written to the City.
Budget Officer Carol Collings advised that the General Fund balance increased by $648,000
during the last fiscal year. She said that $117,501 of one-time capital items will be drawn from
the General Fund balance rather than raising taxes to support programs for Police, Fire, Parks
and Recreation, and Library. A transfer of $319,096 from the Police/Fire Pension Retirement
Fund, formerly budgeted, is not now being recommended.
Ms. Collings explained the Local Option Tax Fund. She said that a fund balance is reserved at
25% of budgeted expenditures less the 60% tax relief transfer; revenues are for cash flow and
revenue fluctuations. Hotel/Motel Tax revenues were also reviewed. Pertaining to Leased
Housing, Ms. Collings advised that in 2004/05, federal reimbursements for rent payments and
administrative expenses dropped substantially. The City dropped one FTE and shifted 90% of
the Housing Coordinator’s salary to the new Community Development Block Grant (CDBG)
program; however, even after these changes, program revenues are not sufficient to cover
expenses, and the City is investigating contracting with another Housing Authority to provide
the program in 2005/06.
Mr. Pitcher stated that it is anticipated that the Tax Increment Financing (TIF) fund balance will
have adequate funding by the end of FY 2004/05 to meet the remaining TIF debt obligations,
and the property valuation will be released for general taxation.
2
The Park Development Fund was briefly reviewed by Ms. Collings. She then gave a summary
of the Utility Funds. Mr. Pitcher reiterated that an increase in the Sanitary Sewer Utility will be
necessary in the future (by 2006/07) to ensure that the projected operating expenditures, capital
improvement costs, and fund balance levels are covered over the next five years. He advised
that rates had not been raised since 1995. Projected revenues, based on the current rates, and
capital improvement projects through 2010 were reviewed. He provided some options to cover
the increases in expenses. The best estimate at this time is that a 15% increase will be required.
It appears that a 10% increase initiated one year earlier (in 2005/06) would accomplish the same
financial goals for the Utility and could possibly be achieved through an increase in the
minimum bill, rather than increasing the volume usage rate.
Pertaining to the Electric Utility, Mr. Schainker stated that the City has drawn down the
available balance by over $30,000,000 in the Electric Fund to finance a new combustion turbine
peaking unit to increase capacity and a new 161 kV tie line to improve the City’s ability to
import energy from other sources, if needed. Mr. Pitcher advised that a major capital
expenditure will be needed in the next five years to ensure that the City can meet the demands
of its customers over the next 20 years. Mr. Schainker advised that additional studies were
necessary, and as more information on the timing and cost of this large project is available, rate
change recommendations will be made.
Sample rates were shown to reflect a 3.5% electric increase, 10% sewer increase, and 50% storm
water increase on median and large residential customers. Council Member Cross would like
to see sample rates if all utility increases were not effective simultaneously.
Ms. Collings summarized Electric Operations and Parking Operations and Improvement. Mr.
Pitcher advised that there is a team of departmental employees exploring improvements to
collections and enforcement of parking tickets.
The negative balance in the GSB Transit Trust was explained by Ms. Collings. Student fees
collected in the next year will not cover its obligations to Transit’s operating budget, and the
additional amount needed will be transferred from the GSB Trust Fund to operations; that
transfer will create a deficit in the fund, which will be repaid in future years.
The Storm Sewer Utility Fund was revisited by Ms. Collings. An increase of $.75/month will
be needed in 2005/06 to cover two additional $100,000 ongoing capital improvement projects.
Staff is concerned about Ice Arena Operations as expenses are up, but rates have already been
increased. Parks & Recreation Administration has been challenged to market this facility to
increase usage. Ms. Collings pointed out that Homewood Golf Course is showing increased
revenues as is Resource Recovery Operations.
Budget requests were briefly reviewed from the Commission On The Arts, ASSET, Public Art
Commission, Ames International Partner Cities, Special Olympics, Reiman Gardens, Leaders
Inspiring Connections, Main Street Cultural District, West Fest in Nevada, Ames Historical
Society, and the Hunziker Youth Sports Complex.
Mr. Schainker distributed a revised Capital Improvements Plan project sheet for the Shared Use
Path System. The City Council had requested that the segment on Grand Avenue, Murray Drive
3
to 20th Street, be moved up to 2005/06. Two options for accomplishing this were explained. He
stated that Public Works staff recommended that none of the segments be dropped.
COMMENTS: Moved by Goodhue, seconded by Vegge, to refer to staff the petition requesting
a stop sign at the intersection of Country Club Boulevard and Cessna Street. Discussion ensued
among the Council members concerning the complexity of the signage denoting parking
regulations.
Vote on Motion: 6-0. Motion declared carried unanimously.
ADJOURNMENT: The meeting adjourned at 4:18 p.m.
_______________________________ _____________________________________
Diane Voss, City Clerk Ted Tedesco, Mayor
4