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05/03/2021 - Summary City of Tigard f i� Budget Committee Summary Monday, May 3, 2021, 6:30pm Virtual Meeting, Tigard, Oregon 97223 MEMBERS PRESENT(10): Tim Cadman, Leah Voit, Kris Mitchell, Chris Bence, Councilor Newton, Mayor Jason Snider, Councilor John Goodhouse, Councilor Shaw, Council President Heidi Lueb,Jim Knowlton MEMBERS ABSENT(1): Siobhan Chandler STAFF MAKING PRESENTIONS: Steve Rymer- City Manager, Nicole Hendrix-Senior Management Analyst, City Management,Toby LaFrance - Finance and Information Services Director, Kathy Nyland -Assistant City Manager 1. Convene Budget Committee-Leah Voit, Chair Leah cr-lered some housekeeping items and outlined the day's agenda and lead a round of introductions of the budget.:ommittee and the leadership team. 2. Public Testimony • Shawne Martinez-asked the city to prioritize walking/roll/transit infrastructure projects to get people out of their cars.Toby LaFrance responded. • Mike Antonelli-was concerned about the Tyler project cost and why was the city buying food trucks? Toby LaFrance/Mike Nolop from IT responded, as well as Lauren Scott, Community Engagement Coordinator. • Rupert Reinstadler-indicated that spending money on an ''Anti-Racism Action Plan & Public Safety Board" is a waste of money. He would rather the city tackle homelessness and crime.Toby LaFrance responded. 3. Approve Minutes from 4/24/21 meeting • Councilor Shaw moved to approve the minutes with changes made. It was 2"d and passed. 4. American Rescue Plan Community Investment Recommendation: Steve Rymer/Nicole Hendrix Tigard has been involved in relief efforts for residents and businesses: $3.5M-Tigard Cares business cares and loans; $2.2M Tigard AID for city fees and charges assistance; $200k RAFT-for non-profit organization grants, and $90K Community Resiliency for community morale activities.There is $491 K resources remaining. • rigard has been awarded money from the American Rescue Plan (ARPA)to respond to public health emergency and economic consequences; provide government services to help offset declining revenues; to make necessary investments in water, sewer or broadband infrastructure and to support private nonprofits that aid the homeless.We are waiting on US Treasury for guidance on what we may or may not spend the funding. City of Tigard Budget Committee Page 1 • Guiding principles are to prioritize fiscal stability; pursue intentional, impactful and immediate community projects;avoid establishing new programs where ongoing funding sources aren't identified; maintain clear records of spending and document success, and advance the council goals of community resiliency, COVID-19, unhoused support and Parks and Recreation. • The city has identified five investment categories;connectivity and access in underserved areas; housing and economic security; community resiliency,water infrastructure enhancements, and sustain city services. • Recommended direction to the budget committee: no impact to budget as proposed; grant funds will be accounted for in the financial management system; supplemental budget hearings will be held for community visibility; budget committee provide guidance on the 5 investment categories listed above. • Moving forward,the Tigard team will develop projects ideas and scope, coordinate and leverage partnerships, conduct a public hearing as project plans are finalized, report ARPA grant revenues in the Annual Financial Report, and monitor and adapt to the guidance of the US Treasury. • COMMENTS: Zouncilor Goodhouse:this is a once in a lifetime opportunity and should look where we might never be able to fund ourselves. Look in areas we may never get additional funding. Council President Lueb: Understand and appreciate the project opportunity to be done with this money, but feel it would be hard to support anything that doesn't help people and businesses in this pandemic. Can see backfilling for money the city has spent, but not sure about big projects:- Steve Rymer-will work to help get funding to our community and may see shifts in categories as needs come forward. Councilor Newton: She concurs with Council President Lueb and wants to make sure people get help. There are people that don't know how to get assistance and food. Referenced Brooks Institute article that spoke about immediacy. She supports continuation of programs we've already got in place and partnering with schools-they aren't funded June-September. Feels like it's a recovery act, so need to focus on recovery. Steve Rymer:working in partnership with state and county-will pay attention and make sure we're at the table for those discussions. Chris Bence-asked about sustainability vs one-time payment. Steve Rymer-sustainable strategy involves setting up revolving funds to sustain certain city services, like fleet. Now it comes from the operating budget so we're trying to set up the funds in advance so we can take out the volatility. Leah Voit:What are revolving internal funds? Steve Rymer: Fleet-establish a plan to replace vehicles-save the money so when it's time to replace a vehicle, we have the money and it doesn't come out operating. Same with facilities-if we save because we know the carpet will need to be replaced, then when the time comes, it will come out of savings. For IT, save for Tyler so we establish funding from the operating funds that pay into the savings proportionately. Councilor Shaw:Applaud Tigard for providing relief early in the pandemic and implemented programs and good to look holistically and sustainability issues. Mayor Snider: Need to meet the community where the help is needed. May need to be more bold in our assistance. Tim Cadman: Pay attention to why we're receiving this money as it's for a specific purpose and should be used for that purpose. City of Tigard Budget Committee Page 2 Jim Knowlton: is there a way to structure at least some of the ARPA funds so that they can be set aside quarterly rather than annually?So as we move through the quarters, we see how things are going regarding the pandemic. Steve Rymer:We have until the end of 2024 to spend the money received. Leah Voit: How are projects being prioritized? Steve Rymer: Starting with guiding principles, and the team is working through developing the process and tonight's comments will help with prioritization. Zouncilor Newton:Will the team be looking at direction recommended by Treasury?Where does the impacts of COVID-19 fit into the investment categories outlined earlier? She also wants the message to be more clear that we're investing additional money to the community.When she looks at the PowerPoint, she doesn't see the recovery for the community. Can the city facilitate to get people connected to services? Steve Rymer:Treasury guidance:we will look at what we've talked about and determine if we're in alignment with that guidance. COVID-housing and economic security area; unused utility assistance will also help in this area; connectivity and access will indirectly help the community. Councilor Shaw:We have given quite a bit of aid to social service agencies in this budget. Maybe after we receive guidance from Treasury,we can reconvene the budget committee to discuss and she echoes Councilor Newton's comments that the money should be used to help residents. S. Follow-Up/Questions& Discussion on items from 4/24/21 meeting • 4th of July Community Event Funding-Toby LaFrance We received communication that we withdraw the 4th of July community event funding, as the event is canceled this year, due to COVID.They were awarded $9,485 from Transient Lodging Tax and $10,000 from general fund, for a total of$19,485. City is recommending we keep the budget as proposed in terms of total dollar amount-place the money into unassigned areas for grants.Over the course of the coming year, if an event comes up, council will have money to support it if it chooses to do so. Comment: Chris Bence wants to recommend the money be spent on either Social Services or Community Events only. Leah Voit asked for clarification on whether funding was still requested to store the fireworks. It was clarified that they are not asking for this funding Councilor Shaw-asked for clarification about whether the dollar recommendations in the budget are the final numbers or does council do that?Toby said the grant numbers are in the proposed budget and the budget committee and/or council can change that funding. Mayor Snider moved to accept staff recommendation to keep the money in the budget and that the money be allocated to social services. It was amended by Tim Cadman to include either Social Services or Community Events, as Chris Bence recommended.Toby added that money from the Transient Lodging Tax would go toward an allowable use, most likely a community event. It was 2"d and passed. • Total Cost of Public Safety Advisory Board (PSAB)-Kathy Nyland After council approved the formation of the PSAB, city management hired a consultant to develop a scope of work and reallocated city funding for their services.Also in 2020, a Management Analyst position was approved for PSAB work,among other duties. In addition, $60,000 was approved for continued consulting services.The proposed budget includes a baseline adjustment for the current FTE and funds to continue the facilitator/moderator and educational proponents associated with the advisory board. Every quarter we evaluate and continue to move responsibilities from the consultant to our team. rhe work of the advisory board should be completed by June, 2022.We recommend you include this budget ask that is in the proposed budget. City of Tigard Budget Committee Page 3 ZOMMENT: Councilor Goodhouse: Thanked Kathy Nyland for the information. Councilor Newton: Important to use facilitator because we're asking people to talk about different things of a more personal issue. Staff person-when the work is done in June, will the position go away. Kathy Nyland responded that no, there is a lot of work to be done to meet council goals. Mayor Snider:This is an important group-with the resources devoted to it,we need to make sure time is spent judiciously.Would like to have a definite end and the workplan is completed in that timeframe. Kathy Nyland stated that the group does have specific workplan and goals and they're making sure those goals are made. Councilor Shaw:Appreciate the clarity of the memo on PSAB and the work of staff. • Emergency Reserve-Toby LaFrance The Emergency Reserve is set at $1 million and was originally set during the FY 2108 budget cycle.We've maintained that amount until COVID.We've used $200,000 for COVID (much has been returned). Looked at the Government Finance Officers Association (GFOA) as a resource for best practice regarding the Emergency Reserve. They lean on Generally Accepted Accounting Principles (GAAP),who categorizes fund balance from most restrictive to least restrictive. Currently,Tigard has 3 assigned fund balances: Cash Requirement Reserve, Service Level Reserve and Emergency Reserve. In order to make any of these a committed reserve which is more restrictive, it would take a resolution and vote before council. In order to use any fund balance, it requires a supplemental and go before council. In order to use a committed reserve, the supplemental needs to specifically state that the committed reserve is being used. The city .-ecommends that we take this information and provide follow-up to the committee in order to continue this conversation during our fall budget committee meeting.We can discuss how restrictive should it be, or make it more committed reserve, nature of the reserve, dollar amount and purpose. COMMENT: Councilor Goodhouse: Thanked the city for the information.Would like to have information at the fall meeting of what other cities do in terms of restricted vs non restricted, and their dollar amounts. Jim Knowlton-appreciated the information-would like to see what alternatives and arguments for and against the different reserve types. • Four Year Operating Budget Growth-Toby LaFrance Operating budget includes the people, materials, supplies and services to provide services to the City of Tigard.This has gone up 33%over the last 4 years.As an FYI, the budget document contains FY 19 and 20 actuals and FY 21 and 22 budgeted numbers.The actuals are going to be lower than the budgeted because the budgeted numbers are the maximum the city can spend. For the purpose of the analysis, Toby compared adopted budgets. Some growth is due to normal inflation -11.8%over 4 years (COLA and step increases, growing cost of benefits, and inflation on our materials and professional service costs and contracts) and intentional budget changes-21%change over 4 years.These changes are made at the budget committee or council level that are beyond the city's control.The smallest growth is the FY 21 to FY 22. Looking at the General Fund over the 4 years, inflation was about 11% and budget changes included just one-the photo enforcement staffing and contract.This addition,which comes with revenue, created a significant budget change. Central Service funds,where we have the largest single growth, ncludes Finance, Central Services, Information Technology, Communications, City Management, HR, Fleet and Facilities.Total growth was about $7.6 million,with inflation at 12%.The largest budget change is in IT with the Tyler project. Lastly, we looked at the bulk of other funds, including streets, parks, building, etc.An important note is that the changes came with additional revenue source:we created the construction excise tax two years ago, police levy and parks maintenance enhancements. COMMENT: Tim Cadman-thanked Toby for the analysis; gives him confidence about decisions made. He has no concerns about where the city is,financially. Recommended that communication be proactive about how the city spends its money. Mayor Snider: Previous comment about communication is very important and use it proactively.These increases could raise several questions from the public.This analysis should be front and center when City of Tigard Budget Committee Page 4 increases occur and aren't inflation-driven.Jim Knowlton agreed with the Mayor. Toby indicated that he could improve this information in the Long Term Financial Forecast portion of the budget document. Councilor Newton:Would like the analysis put into the budget. Decisions were made deliberately, and important for community to understand these decisions. • Other Questions regarding the Proposed Budget? None were asked. 6. Budget Consideration for Approval • Technical Adjustments-Steve Kang • Operations: carryforward $300,000 • CIP-carryforward $3,644,445; new request-$245,000-$20K to replace generator. • Transfers: CIP-$3,728,500 • Operating Transfer for mini excavator-$75,000 • Public Hearing on State Revenue Sharing-Toby LaFrance • Toby explained that in order to receive state revenue sharing-liquor taxes revenues,the committee needs to pass a motion to accept these revenue dollars into the general fund. (Approximately $655,000). It was moved by Council President Lueb moved and 2nd by Councilor Shaw to accept state revenue sharing source. Motion passed unanimously. • Debt Service and Levy Property Tax Rate-Toby LaFrance • Toby explained that it is required that the budget committee levy property tax rate at$2.5131 per $1,000 AV, local option levy rate of$0.29/$1000 AV and to levy debt service for general obligation funds in the amount of$2,622,000. Motion by Chris Bence was made and 2nd by Council President Lueb. Motion passed unanimously. • Approve the FY 22 Proposed Budget • It was moved by Tim Cadman and 2nd by Jim Knowlton to approve the proposed budget with technical adjustments of$7,992,945. Motion passed unanimously. 7. Budget Committee was adjourned. The meeting was adjourned at 8:50 pm. Liz Lutz, Finance6epartment ATTEST: Chris Bence, Secretary t City of Tigard Budget Committee Page 5