Mayor Lou Colosimo
Councilmembers: Roy A. Nikas, Betty P. Wheeler, Joe L. Piccolo, Steve Bringhurst, Stephen L. Denison
Vernon W. Jones (Adminis. Ass't.), Joanne Lessar (City Recorder), Pat Larsen (Finance Director)
Others Present: Lisa Petersen
1. BUDGET SESSION - FY1997/98
Pat Larsen presented several budget reports pertaining to Capital Projects, personnel, equipment maintenance, and new purchases. She has been able to balance all of the funds, except the General Fund, which is out of balance by $753,345. By working together with the supervisors and Councilmembers over their departments, she has deleted some major and minor items. The Parks Department deleted temporaries, the Streets and Maintenance Department deleted two temporaries, and the Shop Supervisor has been eliminated. The $300,000 placed in the budget for the electrical portion to annex the East Price area was reduced to $100,000. The bubble was eliminated. Vern and Cobb cut everybody's budget as much as they could on simple line items. Approximately $20,000 worth of computer equipment has been eliminated. The 3% cost of living plus 1 1/2% for wage adjustments is still in the budget.
Under Capital Expenditures, there are some items totaling $200,000, which are the 3 police cars, two 2 1/2 ton dump trucks for $50,000 each, and a one ton dump truck for the Parks Department for $25,000. If these items are leased, it would save $160,000. The interest on leases are very low right now. Payments would be $40,000/year over a 5 year period. If the decision is made to lease, it needs to be done as soon as possible to take advantage of the low rates. The Council questioned a lease arrangement. Pat explained that when a government agency leases an item, they have to own it at the end of the lease. Leasing is just a technical term, it is actually financing. Government agencies are not allowed to go into debt without a vote. You can't obligate future funds unless there is a taxpayer's vote. The lease agreement stipulates that if an agency cannot make a payment a particular year, they don't have to.
Pat stated that the boom truck for trimming trees was eliminated. The Central School building (Price Community Center) was out of balance $50,000. If she takes $28,000 out of fund balance this year and $50,000 out for next year, there will be nothing left. She asked for direction from the Council, whether it should be funded out of fund balance or the General Fund. It was recommended to take it out of Fund Balance until it runs out and then take it out of the General Fund. One employee will be eliminated from the Price Community Center, whether it be a transfer or a lay-off.
Councilmember Bringhurst recommended that the building for Cliffview Cemetery be eliminated for $40,000, and earmark $2,000 for a storage shed. Vern recommended that the funds to relocate the cemetery fence be deleted. This is contingent on the Anadarko Road being developed. There is nothing dedicated or saying that this street will be there. It was moved to the next budget year. The ball park asphalt was discussed. Pat stated that $50,000 was carried over from this year for the asphalt. With the $60,000 she put in for 97/98, $110,000 will be available for this project. It was recommended to reduce this to even further, such as $30,000 for 97/98, which would bring the figure down from $110,000 to $80,000. Another $30,000 could be appropriated for the year 98/99. Councilmember Nikas recommended eliminating the pup trailer for $18,000 and move it to the next budget year.
Two computers and printers for the swimming pool were eliminated in the amount of $4,000 and moved to the next year. The $1,000 for the fax machine will be left in. The network cards and wiring for the pool in the amount of $1,000 was eliminated. The fire alarm for the Price Community Center in the amount of $5,000 was eliminated. The Council discussed what to lease and what not to lease pertaining to the purchase of police cars, one ton trucks, and dump trucks. It was recommended to review the lease figures again before a decision is made. Up to this point, Pat indicated that the budget has been reduced by $268,000, with $485,000 more to go.
The Council discussed retirement benefits and the amount being
contributed to the State Retirement Fund and the State 401K program. Councilmember
Bringhurst stated that 10% of an employee's salary goes to State Retirement, 0.6% goes to
the disability program, and 7% goes to the 401K program. No one else gives this type of
retirement benefits to their employees. Mayor Colosimo stated that there were years that
in lieu of salary increases, employees opted for higher retirement benefits. Councilmember
Piccolo recommended coming up with a fair and equitable retirement program where the
employee could participate. Pat stated that the County has capped their retirement
contribution at 15% and 0.6% for Long Term Disibility. Their contribution to State
Retirement is 10.24% and and 2.76% to the 401K. The deputies in the Sheriff's Department
aren't getting anything applied towards their 401K because their State Retirement is
higher than regular public employees. Pat stated Utah State Retirement rates increased
$15,200 over last year. Total insurance premiums for next year is estimated at $517,641.00
and retirement is $436,584.00. The total for all benefits is $1,237,459.00. Health
insurance has gone up $42,000 for next year. To reduce costs, the Council discussed
cutting services and personnel. Pat stated that she transferred $1.1 million from the
Electric Fund to the General Fund. The Council expressed concern about keeping adequate
reserves in the Electric Fund in case of emergencies.
Pat stated that the cost for requested reclassifications is $15,000, the 1 1/2% wage adjustment is $36,300, plus the 3% cost of living. The cost of living adjustment for last year was 3.1%. It was brought to the Council's attention that property taxes have gone down over the last few years. If the residents want to keep the level of services as they are now, they may agree to a property tax increase. The transient room tax for municipalities was discussed. Vern Jones stated that the state allows a 1% tax which could go in the General Fund. If it goes another 1/2%, then you have to reduce property taxes a 1/2%. These funds could be used to offset some of the City's expenses towards contributions to the independent groups, such as Carbon Future, Chamber of Commerce, etc. After further discussion on ways to reduce the budget, it was decided to delete the 1 1/2% wage adjustment and retain the 3% cost of living, cap the retirement rate at 15.6%, and cap the insurance rates at this year's rate. These reductions would save $128,000. The decision was also made to deny all requested reclassifications. It was recommended that in the future, the 6 month probationary increase be set at half of the cost of living increase. It was recommended to work on raising revenue. We are not making was much as we should be. The Council supported implementing the transient room tax, but felt that any increase in property taxes should be withheld until evaluations are completed on residential and commercial property.
The Council discussed the issue with Price River Water Improvement District. There has been no correspondence since the City sent a letter recommending that the District consider reimbursing the City for sewer maintenance. It was the Council's feeling that the District should be billed for all routine maintenance, repair work, call outs, labor, materials, benefits, vehicles, and equipment usage. Garbage service was also discussed. A 6% administrative fee on the garbage service would be an additional $13,500. Vern Jones addressed the issue of deregulation that the Legislature passed. The City now has to assess themselves (Electric Department) the same franchise fee assessed to Cable TV, Utah Power & Light, etc., which is 6%. This can be done by charging customers an additional 6% and decrease the rates so that it is a "wash". Or you can do an in lieu of franchise tax. In other words, the contribution would be placed in the General Fund every year and broken into two segments, one would be a contribution and one would be in lieu of. The numbers would add up the same.
The Council discussed selling the City's surplus property, such as Olsen Reservoir. This was reviewed last year but nothing was done. Councilmember Piccolo recommended closing 2nd North between 6th and 7th East and selling the two building lots.
The Council directed Pat to place $40,000 in the budget for the 1% transient room tax and $13,500 for an increase in garbage rates, and to remove $3,500 from the Council's travel budget. The Council recommended stressing to department heads to be frugal in their purchasing and if there is money left in their budget at the end of the fiscal year to turn it back in instead of trying to spend it all. The Council discussed ways to cut back on maintenance, such as changing the landscape in the parks.
The suggestion was made to purchase one snow plow and delete one in the amount of $7,000. However, it was questionable if the old snow plows will fit on the new 2 1/2 ton dump trucks. The need for a plasma cutter and impact wrench in the Shop Dept. was questioned.
The Council cut back on the overtime in each department, and cut travel another 10% beyond what had already been cut. Pat stated that when she distributes the budget, she will make a note to the supervisors regarding overtime.
Pat stated that with the above adjustments and cuts, that the budget is almost in balance. She will need to work on it a little more.
Meeting adjourned at 8:45 p.m.