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HomeMy Public PortalAbout2015_tcmin0413Spec COUNCIL SPECIAL MEETING April 13, 2015 Council Chambers, 25 West Market Street, 4:30 p.m. Mayor Umstattd presiding. Council Members Present: Kelly Burk, David Butler, Thomas Dunn, Suzanne Fox, Katie Sheldon Hammler, Marty Martinez and Mayor Umstattd Council Members Absent: None. Staff Present: Town Manager Kaj Dentler, Deputy Town Manager Keith Markel, Town Attorney Barbara Notar, Director of Finance and Administrative Services Clark Case, Director of Parks and Recreation Rich Williams, Chief of Police Joseph Price, Director of Capital Projects Renee Lafollette, Assistant to the Town Manager Scott Parker, Director of Planning and Zoning Susan Berry Hill, Director of Utilities Amy Wyks, Library Manager Alexandra Gressitt, Management Analyst Lisa Haley, Management Analyst Jason Cournoyer, Interim Information Technology Manager John Callahan, Director of Economic Development Marantha Edwards, and Executive Associate I Tara Belote. AGENDA ITEMS 1. CALL TO ORDER 2. ROLL CALL: Showing all members present 3. PUBLIC HEARING a. Tax Rate The public hearing was opened at 7:30 p.m. Mayor Umstattd noted that the staff recommendation is $0.183, which is the current tax rate. Clark Case gave a brief presentation. • Tax rate must be approved this week in order to get the bills printed and distributed by the first week of May. • Proposed$0.183 tax rate would create an increase of less than$22 for the average single-family homeowner. • Residential equalized rate is $0.18. • Comparisons with surrounding, similarly sized communities puts Leesburg at one of the lowest rates. • The bond rating agencies focus on adherence to the long-term sustainability plan. • The 20% undesignated fund balance policy, maintenance of the stable $0.183 tax rate, and conservative budgeting and fiscal management practices are all points that factored into the AAA bond rating. • This rate allows achievement of all of the town's fiscal goals. Council Questions/Comments: • Dunn: What is funding the government—the tax rate or the budget? 1 I Page COUNCIL SPECIAL MEETING April 13, 2015 Staff answer: The budget is funded by the tax rate. The tax rate sets the rate that the town charges real property for$100 of assessed valuation. • Dunn: If we want a lower tax rate, there may need to be cuts. If we have a higher tax rate, we have more money to fund government. Lowering the tax rate does not necessarily "unfund" government. • Dunn: How long does staff intend to recommend a level tax rate? Staff answer: It is throughout the long-term sustainability plan—seven years. Rates can start to reduce in 2022 because debt service begins to go down unless Council chooses to add new projects to the Capital Improvements Program. • Dunn: Debt could be paid off early, if money wasn't spent on projects. • Butler: If we drop the tax rate, then we need to reduce our spending/services, but if we increase the tax rate, it doesn't mean it would be spread throughout the budget, but it could give us a head start on funding our reserve. • Burk: It is really important to look at what other localities are doing in the area—we can see that Leesburg is still one of the lowest areas and providing a lot of services within that tax rate. • Hammier: Assessments are predicted to increase 2%per year, but what is the prediction for the inflation rate? Staff answer: 2% • Hammier: There is no room for additional Capital Projects; however, the $2.5 million reimbursement for Hope Parkway could be used to either pay down debt or increase capacity for additional projects. Would like to consider putting the bike lanes on Plaza Street and money for a match with the county to get the Veteran's Park project rolling. It is important to get an answer on who and how they will be responsible for TMDL and anything that is in the town's capital projects list. Staff answer: Hope Parkway funds are programmed into the CIP, so the current CIP projects assume that the Hope Parkway money will become available starting 18 months out and then across the next five year period. It has already been programmed into the Long Term Sustainability Plan. It is not extra money, but money that will be used to avoid borrowing bond proceeds. • Hammier: So, $57,000 for the bike lanes on Plaza Street cannot be funded this way? Staff answer: The threshold for Capital Improvements Projects is generally $60,000, so we would look to fund something like that out of the General Fund. • Hammier: I would like to consider a second recycling day given that the bins are small and do not have covers or bins with covers. Staff answer: It would cost approximately$600,000 for bins with lids. • Hammier: Is $22,000 for downtown recycle bins possible under the $0.183 tax rate? • Hammier: Are the additional crosswalk safety items included in the budget? 2 I Page COUNCIL SPECIAL MEETING April 13, 2015 Staff answer: They are included in this year's operational budget. • Hammier: As far as the additional overtime for police, the citizen expectation was that would be normal operational activities. • Hammier: When did the town stop charging for the July 4 regional event? Staff answer: In 2006, at which point Council made the decision to give back to the community rather than make it a revenue generating event. • Fox: Has anyone given any thought about what would be necessary to reach the equalized rate - $0.18? Have there been any discussions about how to hit the equalized rate? What are the cost factors that make that impractical? Staff answer: Debt service is the primary driving factor with a spike in 2017. The Long Term Sustainability Plan sets aside the first two years to get us past that "cliff". The $0.183 raises revenue as we go so that we cross the "cliff" with enough money to keep the rate level through the next seven years. • Fox: Keeping the rate level for seven years is tantamount to a tax increase for everyone for the next seven years, if you assume a 2% increase in assessments? Staff answer: Yes. • Fox: I would like to consider some different opportunities for the skate park. There is an opportunity to save a little money. • Dunn: Do we have the revenue numbers for the towns that we are compared to? How do the tax rates compare in actual dollars? Throwing out tax rates is not necessarily clear because there are other factors that go into that. Someone could have a multimillion dollar homes and a much smaller tax rate, versus other localities that have lower valued homes and a higher tax rate. Would like the dollar amount of revenue and population size. Staff answer: Those numbers can be provided tomorrow. There were no members of the public wishing to address this public hearing. The public hearing was closed at 7:58 p.m. On a motion by Vice Mayor Burk, seconded by Council Member Martinez, the following was proposed: ORDINANCE 2015-0-008 Ordaining Chapter 20(Licenses, Taxation and Miscellaneous Regulations), Article II(Taxation Generally), Section 20-22(Annual Levy and Rate of Taxes), and Appendix B(Fee Schedule)Setting Tax Rates on Real Estate, Vehicles Used as Mobile Homes or Offices, Tangible Personal Property, Real Estate and Tangible Personal Property of Public Service Corporations, and Setting Utility Water and Sewer Rates for Tax Year 2016 3 I Page COUNCIL SPECIAL MEETING April 13, 2015 Council Comments: • Martinez: One of the things I have talked with staff about is a conservative tax rate that covers everything needed. If the economy changes, things may need to be reassessed; however, staff has proven itself in managing the budget well. • Hammler: I do not have a problem voting for the tax rate tonight; however, I did not bring my computer because I brought my binder and I figured we would be digging through that. I just don't remember what is on the agenda for tomorrow in terms of each of the other votes we have and the opportunities for tactically looking at specific line items that could be added or subtracted that doesn't impact the tax rate. Is that what we will be doing tomorrow? Staff answer: Right now, you are dealing with the tax rate. • Hammier: If the items suggested tomorrow night do not impact the tax rate, I will be supporting the existing tax rate of$0.183, which is on par with the inflation rate. It is reasonable in light of the no-frills budget. I have examined and reviewed every line item in this budget document and created over three hours-worth of questions at our budget work session. I did follow-up on some bigger ticket items —for instance $4.5 million of additional revenue is technically coming in with the ambulance reimbursement and how that could offset the need for town funds and I feel confident that it is important that we work together to see how those funds come in. I appreciate the positive support from Mr. Wolfe and Mr. Kaupin regarding having an official liaison to the Fire and Rescue as we examine FY 2016. Also, I appreciate that we did not dip into our rainy day fund, as the county did, to reach an equalized rate. From our perspective, ours is a fiscally conservative, sustainable and manageable approach. I assume we will not be able to get to an equalized rate in the future. We need to start looking at new ways of doing business and initiate projects to get us there immediately that will either decrease expenditures or increase revenues. One specific item will be looking at new capital contribution guidelines to ensure that we are getting the maximum amount we should be for police, public safety, TMDL types of projects, parks and recreation, and other things. I know we will be having important discussions about Balch, Fire and Rescue, and also believe we need a task force in place between the police department and sheriff's office to come up with some very specific ways that we can increase and maximize all efficiencies between those departments. Everything will have to be on the table including the fact that we haven't raised our meals tax since 1986. I am extremely proud that our town has achieved a AAA bond rating through fiscal responsibility, predictability and long term planning. • Fox: I think the $0.183 tax rate is responsible. I have gone through the numbers, see what has been planned and it is responsible; however, I have a problem with committing to seven years of tax increases. I reserve that judgement. 4 1 Page COUNCIL SPECIAL MEETING April 13, 2015 Staff answer: The tax rate for seven years is based on current projections. The tax rate decision is something that will need to be made each year. • Fox: Is this what gives us our AAA rating? If we don't keep to the plan, we are in jeopardy of losing our rating. • Martinez: That would be the worst case scenario—keeping the $0.183 tax rate for seven years. Staff answer: It is not the worst case scenario, but a conservative case. • Dunn: Would rather vote on this tomorrow after we have had a chance to look at the budget to see if there are other areas we can adjust our spending to warrant a lower tax rate, which I think is possible. Would like to make a motion to offer a lower tax rate. • Butler: It is a seductive thought, but I reject the idea that the equalized tax rate is a stable tax bill. We have to take into account that inflation is 2% per year, then raising the tax rate 2% every year assuming constant residential prices, is an equalized tax rate. If we do not take inflation into account, we have put in a structural, inflation based tax cut every year. Doing that has put us in the bind that we are in. As long as we don't spend any money, everything is good, but that is not the kind of town that most people want to live in. A constant tax rate for seven years is misleading, because the tax rate out of context says nothing regarding the average tax bill. Taxes can go up, even if the tax rate is down. A constant tax rate does not mean a constant tax bill. In 2008, our tax rate was $0.18, and now it is $0.183, but interestingly, the average tax bill has gone down 35% since 2007, which is more than any other community in the country, I'm willing to bet. We have strapped ourselves so that we are worried about spending any money that would improve the quality of life for our residents. A tax rate of$0.19 would strengthen our fiscal situation considerably. It would provide an extra $450,000 in this fiscal year, which could be used for projects such as the bike lanes on Plaza Street, but it would help us increase our undesignated fund so that we would be able to respond to fluctuating economic conditions. Last month, we heard from most departments that they need more resources to be responsive as our population continues to grow. Our current budget provides none in the general fund and low probability for the next six years. This is a concern. We also have had a recession, but that recession ended in mid-2009. The expectation is that we will have at least one in the next seven years. If we don't do something responsible now, in a couple of years we will have no choice but to raise the average tax bill significantly or start limiting essential services. An average tax rate of$0.19 would still put us below the average tax bill from 2013. It would still represent a tax cut from 2013 —that is significant. This is not increasing taxes beyond the ability of our residents to pay. A couple of years ago, they were paying higher tax bills. All of this would provide a little headroom to get us through the next few years. I would like to make a motion to readvertise the tax rate at$0.19 and provide Council with a little more flexibility to make fiscally responsible decisions. 5 I Page COUNCIL SPECIAL MEETING April 13, 2015 Council Member Butler offered a motion to amend to advertise a$0.19 tax rate. The motion was seconded by Council Member Martinez. Council Comments/Questions: • Umstattd: Is there time to readvertise and get the tax bills out? Staff answer: Two weeks advertisement would be required for a special meeting in order for the tax bills to go out on time. • Martinez: If it will delay the bills or require a special session, I am not in favor of this. • Dunn: I respectfully disagree with Council Member Butler. I do not agree with raising the tax rate, obviously, but to bring up that Council had something to do with the taxes going down 35%, I think the housing market had something to do with that. Now, if Council wants to take credit for lowering taxes 35%, they need to take credit for the crash in the market too. I doubt they want to carry that on their back. The other thing that continues to happen year after year is Council never really seems to find any ability to find any true cuts in the budget and that they only way we talk about being able to salvage our situation in these, whether you consider it, dire straits or not, is to increase taxes. Never do we talk about any substantial cuts. This was brought up last year at this same time that we need to look at the county for helping us fund other items. That got pushed off all the way until January of this year and then when we finally got into a discussion of it, Council decided we are not going to look at any other funding options from the county other than possibly police department and fire and rescue—two items that would be nearly impossible to get a consensus on for any reduction in funding and two that I did not necessarily agree with. I think there are other areas that we can cut in the budget that could reduce our spending and be answers to our situation rather than just always looking at spending more money and provide a number of services that the citizens are looking for because currently, as I have often said, year after year, we get the same discussion. I have been dealing with this for six, eight years now—this budget and the same Council dealing with it—is we never want to make any true cuts. We just want to claim that we have to raise taxes or we are just going to get by and we claim that we are doing all that we could possibly do, and yet I don't see that as being true. Katie mentioned the other day, why don't you bring some real ideas rather than just making comments? Well, I have done that. I have talked about how we could look at better managing brush pick up. What happens then, is people like the Mayor, she will make comments like "oh, so you want to cut brush pick up?" No. It is always some type of political gesture that gets made to make a headline in the paper and we can't manage our budget by political headlines. If we really want to consider how we can better manage the budget, we have to make suggestions on how government is being managed and another example is I put out ideas on how you could possibly manage the Balch Library a little bit better to help reduce some of those expenditures because per capita, it is one of the most expensive 6 I Page COUNCIL SPECIAL MEETING April 13, 2015 services that we provide based on the number of people that use it. Those fall on deaf ears. I wrote down a number of things that the county could be paying for in the town. We decided not to take those up. Supervisor Reid is here tonight. Maybe he will talk about that, I don't know, but there are areas that we could be doing so much more, but we chose not to, but we want to have the people out there in the public think we are absolutely doing all we possibly can and the only thing we can do is raise taxes or have taxes increase at the rate of inflation. Well, maybe we should consider cutting costs at the rate of inflation, but we never mention that. So, I can't support a tax increase or readvertising of the tax increase. I can't even support the current suggestions of the taxes being this level because I think there are other things we can do and also reduce the spending and not affect services to the community. • Butler: I just want anybody who is watching from home—I have a graph showing the tax rate and the average tax bill since 2007 in case anyone wants it. The motion to readvertise a higher tax rate failed by the following vote: Aye: Butler Nay: Burk, Dunn, Fox, Hammler, Martinez, and Umstattd. Vote: 1-6 Council Member Dunn moved to postpone the vote on the tax rate until after budget discussions at the meeting on April 14, 2015. The motion was seconded by Council Member Fox. Council Member Comments: • Hammler: I have no problems supporting that. It is not going to make a difference other than the fact that it would be helpful if we could get some specific numbers around what it means to manage brush pick up differently relative to what the savings will be depending on what that means like how are we managing that differently and how does it translate into a budget savings. So, if we could that information. The same for Balch,just so that we could actually review that tomorrow meaningfully, I would appreciate it. Staff answer: We need much more specifics—those are very general requests. How to manage it differently, how to operate differently—that is not specific enough to give us direction. • Hammler: Council Member Dunn has specific ideas. Staff answer: If that can be provided, we would need that tonight so we have tomorrow to prepare so that we can be ready for tomorrow night. • Dunn: You are welcome to review almost any other budget session we have had over the last six years because I have almost always brought it up. • Hammler: There must be some specific dollars associated with a specific program suggestion. 7 I Page COUNCIL SPECIAL MEETING April 13, 2015 • Dunn: If Y ou'd like, I can talk about it now or I can talk about it tomorrow, but I don't think we are talking about the budget tonight and whether we are going forward with that, but it is nothing new. I have brought it up every year. So, I can repeat it or I can refer you to previous budget sessions and the information is there. • Hammier: I would appreciate it, whatever it is, because it sounds like you know exactly what it is —just tell the town manager so he can be prepared by tomorrow night. I think there is a slight disconnect. • Dunn: Well, I think that what you are going to find, Katie, is that as Kaj has mentioned to us and his staff and the department heads that are out before us, is that this is the best budget that they can prepare. I don't think that they are going to take any suggestions I have as—they put the best effort forward. They are not going to consider other management ideas— this is the best they can do. By the way, we have, myself and other Council Members have put proposals before Tom Mason and how he could possibly manage certain efforts better and those have not taken place. We have also mentioned or at least I have, that there are ways we could cut back in doing certain milling and paving. Nothing happened in there, but the next year when John Wells offered the same dollar amount of cuts, Council agreed to it, but not when Council Member Dunn brings it up. So, again, you want some numbers—I'll throw some numbers at you. Whether staff is in agreement, I'm sure they're not because they haven't been for years. So, we keep the Balch Library open all the time for 20 visitors a day. Staff has to be there for that purpose. I have made simple suggestions that you could have a reduction in staff and still meet the needs of those 20 people that want to go to the Balch Library every day by simply making it as an appointment only service. Again, we don't do that. So, sure, you want me to come up with things? • Hammier: That was specific. So, probably the town manager can give us a number if we went to an appointment only service for Balch—how would that impact a decrease in the budget and in terms of the brush pick up, what are you suggesting? • Martinez: Point of order. We are talking about the tax rate and not the budget. Can we focus back on the tax rate? • Hammier: I'm justifying why I would support waiting until tomorrow as relates to the tax rate, but point well taken. • Burk: I would rather vote on the tax rate tonight so during budget discussions tomorrow, we know what the tax rate is and how much money is there. I think it would be much more helpful to the discussion tomorrow when you talk about different things that you want to add or take out that you have the final numbers and I think that by voting on it tonight, that's what we will accomplish. That is why I would support voting on it tonight. • Butler: I agree with the Vice Mayor. I would just as soon get the tax rate out of the way and we can have a budget discussion tomorrow. If we happen to save $40-50 thousand dollars, I will make a motion for the bike 8 I Page COUNCIL SPECIAL MEETING April 13, 2015 lane, but if we do get to our undesignated fund balance a little bit quicker and have a tiny, wee bit of headroom for anything that pops up during the year. • Dunn: Again, with respect to Dave, that was a perfect example of if there is savings, we will actually look for more ways to spend. It's sort of like the sale at the store—the more you spend, the more you save. We are saying go ahead and figure out what the tax rate is so we know how much money there is. Even if you come up with savings tomorrow night, and that were voted on, we are going to turn around and find ways to spend that savings. To me, that doesn't make sense. So, I can't see voting for a tax rate when you haven't even figured out whether you have all the spending you want in line unless you are just saying "Hey, tonight I'm not going to listen to any tax cuts tomorrow, and if we do actually vote on any type of cutting of the budget, we are just going to find other areas that we can back fill it in." To me that's counterproductive. I would still recommend doing the tax rate after the budget tomorrow. The motion to postpone the tax rate vote until Tuesday night failed by the following vote: Aye: Dunn, Fox and Hammler Nay: Burk, Butler, Martinez and Mayor Umstattd Vote: 4-3 On a motion by Council Member Dunn, a tax rate of$0.169 was proposed. The motion died for lack of a second. Council Member Comments: • Burk: I understand where Council Member Butler is coming from, but I do think that this is a responsible budget and tax rate. I think that, unlike the County, we have not dipped into our rainy day fund and I think they are going to have a hard time next year because they are taking away funding from a savings account that won't be there next year. I believe that the services we are providing do increase the quality of life in Leesburg. Sure, there are things we could add, but I think at this point the quality of life in Leesburg is pretty amazing and the services that we provide are certainly services that the public appreciates. I am always amazed that staff does such a good job with all the different budgets that we have put forward. I think the $0.183 is where we should be at this point. The motion to adopt the$0.183 Tax Rate was approved by the following vote: Aye: Butler, Burk, Martinez, Hammier and Mayor Umstattd Nay: Dunn and Fox Vote: 5-2 9 I Page COUNCIL SPECIAL MEETING April 13, 2015 4. ADJOURNMENT On a motion by Council Member Butler, seconded by Council Member Dunn, the special meeting was adjourned at 8:27 p.m. Kristen C. 'mstattd, Mayor Town of Leesburg , • Clerk of Me cil 2015_tcmin041 10 I Page