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HomeMy Public PortalAbout2010_tcwsmin0125Council Work Session January 25, 2010 Council Chambers, 25 West Market Street, 7:30 p.m. Mayor Umstattd presiding. Council Members Present: David S. Butler, Thomas S. Dunn, II, Katie Sheldon Hammler, Marty Martinez, Kenneth °Ken" Reid, Kevin Wright and Mayor Kristen Umstattd Council Members Absent: None Staff Present: Town Manager John Wells, Town Attorney Jeanette Irby, Deputy Town Manager Kaj Dentler, Director of Finance Norm Butts, Preservation Planner Annie McDonald and Business Retention Coordinator Debi Parry AGENDA ITEMS 1. Work Session Items for Discussion: a. BAR Project Initiative Funding Request Annie McDonald stated further information has been provided to Council in their packets regarding the Board of Architectural Review's (BAR) request for $3,520 in funding to hold a window restoration and weatherization workshop. Richard Koochagian, BAR Member, stated he attended some of the seminars at the traditional building conference in October. He stated he found the window presentations to be helpful in several ways. He stated given the variety of windows we have in the downtown it is important from a character standpoint to allow the homeowners to understand how they operate, how they should work, how easy it can be to maintain the windows and proper weatherstripping techniques. Further, he stated typically homeowners want to replace these windows; however, it is surprisingly easy to fix old windows. Vice Mayor Hammler asked if the Town provided funding for Mr. Koochagian's attendance at the conference and if it was attended by other BAR members. Mr. Koochagian stated the Town did fund the conference attendance for both he and BAR Chairman Dieter Meyer. Marilyn Bos, BAR Member, stated she was not able to attend the building conference; however, it is extremely important for all members of the BAR to know what is out there and this is one of the ways to do that. She stated windows have been one of the biggest reasons for BAR site visits. Further, she stated with all of the technology and repair methods available it is important for the BAR members and the community to be educated. Council Member Dunn asked the amount of reduction from the original request. Ms. McDonald stated the resolution before Council is $500 less than the original request; however, the BAR will make do with whatever is allocated by Council. Town Council Work Session of January 25, 2010 Page 2 Council Member Dunn stated he is always looking for opportunities to save funds; however, Council did set aside a certain amount of funding for Boards and Commissions to use as they see fit. He stated this request fits within the budget and he believes Council should support the BAR's request. Council Member Reid concurred with Council Member Dunn. He stated he is sorry that Ms. McDonald, Ms. Bos and Mr. Koochagian had to come before Council tonight for this item. He stated there are more important areas to cut within the budget than this. He stated windows are a thorny issue for the BAR and any educational efforts in this area would be great. Further, he stated he would be more than happy to help publicize this workshop. Council Member Butler asked how staff arrived at the projected cost of $3,520. Ms. McDonald stated the funding request is based on approximations for travel, facility rental and speaker fees. She stated the BAR can work with whatever funds are allocated by Council. Council Member Butler verified the program is to be free to the public. Council Member Wright stated the information provided regarding the BAR's struggles with applications for windows has helped to clarify the request. He asked if there has been any reaction from the Leesburg Downtown Business Association (LDBA), Downtown Improvement Association (DIA) or Historic District Residents Association (HDRA) to this proposal or any indication that it would be well attended. Ms. McDonald stated there was not enough time for outreach efforts prior to submission of the application and staff was not aware of the need for additional support for the application. Council Member Wright asked why the Town should sponsor this work shop versus allowing interested parties to find this resource. Ms. McDonald provided an example of a historic district property owner of limited means who was able to save money by repairing some of her old wooden windows after speaking with staff versus replacing them all as suggested by a contractor. She stated many of the property owners in the Old and Historic District do not have this information available to them. Vice Mayor Hammier thanked Board Members Koochagian and Bos for attending this meeting. She stated she asked that this item be placed on the agenda for discussion because she was not given a clear answer to her question regarding justification for the funding request. She stated she still had questions after reviewing the information, especially given the discussion regarding user based fees and it would have been helpful to validate that there are citizens interested in this information and that there are low-income individuals who would not be able to pay a fee to attend. She stated she is glad that staff is considering sponsors as many of our commissions are active in looking for ways to offset costs for programs. She stated it is very important to ensure that our board and commission members are receiving the necessary training and she would appreciate staff looking into opportunities for training Town Council Work Session of January 25, 2010 Page 3 and certification with these funds for the members who are making decisions. Further, she stated, to Mr. Koochagian's point, that it would be helpful to institutionalize a "train the trainer" program to make resources available in ways that are not a burden to the general population. Mayor Umstattd asked if staff has a sense that all or most of the BAR members would be able to attend this seminar. Ms. McDonald stated the program has the support of the entire BAR; however, a date for the program has not been set pending approval of the funding request. She stated she is glad to hear Vice Mayor Hammler's comments regarding sponsors as it was recently suggested to her that some of the power companies may be willing to sponsor a work shop of this type. Mayor Umstattd asked if we will be legally able to videotape this program and provided copies to members of the public who may be unable to attend. Ms. McDonald stated she has not explored that option; however, she will work with the Town Attorney and the presenter on that possibility. Vice Mayor Hammler asked if the work shop at the conference was videotaped and available. Ms. McDonald stated all of the presentations at the conference were copyrighted. Council Member Butler suggested charging a small fee for whoever attends as it would help the BAR to save money and it would encourage those who have RSVP'd to attend. Vice Mayor Hammler asked that this be removed from the consent agenda for tomorrow night. Mayor Umstattd stated a fee might not be difficult for many of our Historic District residents; however, it might prevent others from attending. She stated if we are going to insist on a fee we should have the ability to waive the fee for anyone who cannot afford to pay. b. Budget Update Mr. Wells stated the budget is still a work in progress; however, staff is continuing to create the budget based on advertising the current tax rate. Norm Butts highlighted the estimated assessed values for 2010 as $5.6 billion, which is down 5.89 percent overall. He stated the Town is in much better shape than many other communities in Northern Virginia. He stated overall the assessments for single family detached dwellings are down 2.78 percent; however, townhouse assessments are up 6.67 and condominiums are down 10.16 percent over last year. He stated in total residential properties are down an average of 1.1 percent. He stated commercial industrial assessments are up 1.89 percent. Town Council Work Session of January 25, 2010 Page 4 Mr. Wells stated it is important to note that even though commercial is up 1.1 percent if you take away new construction the rate would actually reflect a decline. Mr. Butts stated commercial and industrial represents 26.23 percent of our tax base and the total residential is 67.3 percent. He stated if you add in the multifamily dwelling unit assessment you reach a 70/30 split. Council Member Dunn asked how that ratio compares to previous years. Mr. Butts stated this ratio is an improvement over previous years. He stated part of the reason for the increase has been the rapid decrease of residential assessments. Mayor Umstattd stated when you account for all of the taxes paid the ratio is about 50/40. Council Member Dunn verified our goal for all revenues is a 55/45 split. Mr. Butts stated the effective tax rate for 2010 is 20.2 cents. He stated the budget will be based on the current rate of 19.5 which provides a 0.7 cent reduction in revenue. He stated the total tax levy will be $10.8 million which is equivalent to the levy in 2005. He stated the average single family detached home owner will see a Town tax decrease of $22,84, the average townhome owner will see a Town tax increase of $25.31 and the average condominium owner will see a Town tax decrease of $28.70. He outlined the revenue estimates for FY 2011 stating they are estimated to increase by 1.95 percent. Council Member Wright stated when the Town Code was updated an amendment was made to allow fines and forfeitures to make their way to the Town and asked if staff is tracking those funds. Mr. Wells stated staff is working with the courts to track those funds; however, the trends outlined in the budget do not favor that change. Council Member Wright stated perhaps there is a lag based on the fact that the change was adopted in July. Mr. Wells stated he is not sure that it is all a lag at this point. Mr. Butts stated there was a significant decrease in use of money and property due to the decline in interest earnings. Council Member Martinez asked which fines and fees Council can change. Ms. Irby stated the Town has done everything it can to ensure that violations in the Town are paid to the Town. She stated she is not sure why those funds are not being remitted. She stated the police department has assured her that the level is almost the same as it was last year and the Town has filed a FOIA request with the General District Court to track the funds. Mr. Butts stated Council has the power to set the fines and fees. Town Council Work Session of January 25, 2010 Page 5 Council Member Wright verified some of the utility taxes are set by the state. Council Member Martinez verified there is some room to raise the cigarette tax. Mr. Wells stated one might argue that if you are looking to generate revenue you might consider decreasing that tax. Council Member Martinez stated he wants to be sure that we are looking at all options for additional revenue beyond real estate taxes. Mr. Wells stated the ability to change the rates is variable among the taxes as some have state maximums. Mr. Butts stated staff continues to track revenue from state government as there are changes almost on a daily basis. Council Member Reid asked about the personal property tax reimbursement funding. Mr. Butts stated former Governor Kaine proposed doing away with the personal property tax reimbursement funding in his proposed budget. Mr. Wells stated it is his understanding that the proposed cut of the PPTRA funding is now off the table; however, he has not seen that in writing. Council Member Reid verified we will not know the status of that funding until the adoption of the state budget in April. He expressed concern that we could adopt the Town's budget without knowing if that funding will be available. Mr. Wells stated typically we have a pretty good feeling regarding the status of state reimbursements prior to the adoption of our budget. Council Member Reid asked if Council should adopt the tax rate this year prior to adopting the budget. Mr. Wells stated he would not recommend that. He stated essentially all of the numbers in the budget are estimates. He stated we will not go into the fiscal year without a contingency plan. Vice Mayor Hammler stated one-third of our homeowners will be facing a tax increase of 5.8 percent and asked for the effective tax rate that would allow townhome owners to have a flat tax from last year. Mr. Wells stated it is important to realize that townhomes to not represent 30 percent of the total and the amount of residents who would see an increase would be smaller. He stated you would not want to assume that all in any group would go up or down as the assessment information is based on averages. Mr. Butts stated to get to a flat tax rate for townhome owners the tax rate would need to be reduced by 5.8 percent or one penny. Vice Mayor Hammler stated this would affect 3,960 households. Town Council Work Session of )anuar~r 25, 2010 Page 6 Council Member Butler stated townhomes saw an enormous decrease last year and have rebounded slightly this year. Vice Mayor Hammier stated that is also important to consider. Further, she stated townhome owners tend to have higher homeowner association fees than other types of homes. Council Member Butler verified the arts grant goes to the Bluemont Concert Series. Mr. Butts stated highway maintenance funds from the state will be reduced by 2.4 percent and the 599 funds will be reduced by 5.2 percent. He stated there are still discussions regarding whether these funds will be reduced further. Council Member Dunn stated these are estimates and verified they will be finalized when the state budget is adopted. Mr. Butts stated we are receiving regular updates from VML. He highlighted information regarding the revenue accounts stating the largest non-tax source of revenue is the parks and recreation fees. Further, he stated there are 95 revenue accounts and the top 11 of those account for 83 percent of the Town's revenue. He highlighted actual expenditures for the first half of FY10, adopted expenditures for FY10 and projected expenditures for FY11. He stated staff is in the process of summarizing interview comments for the rebid of the Town's health insurance. Regarding debt service, he stated when the Council did its last bond sale the Town used Build America Bonds which are taxable; however, the Town received a federal government subsidy for the 30 years of the bond issue which brought the rates to below tax-exempt rates. Further, he stated total expenditures increased 4 percent. Mayor Umstattd asked if Congress could legally remove the subsidy in future years. Mr. Butts stated Congress could remove the subsidy and if that happens we have the option of refunding the bonds at atax-exempt rate. He stated at this point we are $1.6 million in expenditures over revenue with the preliminary numbers provided. He stated in the current budget we are $861,000 revenue over expenditures and Mr. Wells has stated we will get to that level or below for the FY11 budget. Further, he stated the undesignated fund balance available is $5.9 million for FY12 if needed. Council Member Reid stated he is very pleased that we are looking at keeping the tax rate level at this point. He stated he received a call from a resident in Greenway Farms whose assessment went up this year. He stated his own residential assessment decreased; however, the assessment for his commercial building on Wirt Street increased. He stated last year we increased the tax rate which affected the commercial tax payers and he is hoping that we will at least keep the tax rate level this year. He stated he would like to go lower as it is our job as Council to use the budget to make strategic and policy changes to look at programs that are not that necessary versus programs that are needed. He stated there are some areas in the CIP where he has ideas for funding. He stated the goal of the budget should not be full employment, which is a Town Council Work Session of January 25, 2010 Page 7 difference in philosophy that he had last year. He stated he looks forward to seeing the contingency plans Mr. Wells discussed. He stated he has no opposition to looking at fees; however, he does not want to increase taxes as he has a feeling that the County will be increasing their rates. He stated he was surprised that at least a few residents in Greenway Farms saw their assessments increase by $3,500. Further, he stated 35 percent of the residents in Leesburg pay HOA fees which is an additional burden that people need to pay in addition to the increase in utility rates. Council Member Butler thanked Mr. Wells and Mr. Butts for their efforts. He stated he is uncomfortable with a $1.6 million carryover; however, he understands these numbers are still preliminary. He stated he is concerned about the funding we will be getting from the state as we show a 4.8 percent increase in funding and he fears there will actually be a decrease. He stated he understands Council Member Reid's concerns; however, the real estate market is spotty. He stated his assessment declined significantly and he lives close to Greenway Farms in a comparable size home. Council Member Wright thanked Mr. Wells and Mr. Butts for the update provided. He expressed appreciation for staff starting at the current tax rate, which would result in a tax decrease for the average homeowner. He echoed concerns regarding state funding. He encouraged residents to be mindful of discussions regarding cutting the reimbursement for personal property taxes as that will result in a personal property tax increase for them. He asked staff to provide information regarding the assessments for CY09 for comparison. Vice Mayor Hammler stated this information is very helpful and helps to frame the areas Council needs to hone in on. She stated she shares Council Member Butler's concern regarding the carryover funds. She stated it provides a good guidepost as we are looking at specific line items and policies and programs. She stated clearly when you look at what the County Administrator has advertised as an upper limit for residential tax rate it would result in a 10 percent increase for her or $50 more in taxes per month. She stated our citizens pay both Town and County taxes and she looks for creative ways that the Town can influence the County budget as it has an impact on Leesburg. She stated we not only need to be mindful of the State's transfers to us but also be vigilant regarding the County's transfers to us for School Resource Officers. Further, she stated to follow up on Council Member Reid's comments, personnel accounts for 61 percent of the expenditures and asked if Mr. Wells plans to propose a merit increase this year. Mr. Wells stated based on the numbers he has at this time and the uncertainty of the State budget he does not believe that the Town will be in a position to fund merit increases for the upcoming fiscal year. He stated we could revisit that possibility at a later time. Further, he stated he and Mr. Butts have met with their colleagues from the region and none of the other jurisdictions are proposing merit increases with the exception of Loudoun County Public Schools and one other municipality. Vice Mayor Hammler stated she is looking forward to the process and fully supports taking a day off work to participate in a productive budget session. Town Council Work Session of January 25, 2010 Page 8 Council Member Martinez stated we can take pride in the fact that the Town has remained constant for over the past few years as compared to the County. He stated he is not looking for massive cuts this year; however, his fear is the uncertainty of the State budget. He stated if we do need to generate more revenue he would not want to increase the real estate taxes; rather, he would support looking at increasing other types of revenue such as fees. He stated he is pro-business; however, the market will dictate businesses. He stated if a business is having trouble it is not the job of the Town to subsidize it. Mayor Umstattd thanked Mr. Wells for adhering to the commitment to hold the real estate rate resulting in a tax decrease for the average homeowner. She stated she believes this will be the third year in a row with no increases for staff. Mr. Wells stated if we do not include a COLA or merit increase for FY11 it would be the second year in a row. He stated two years ago we did not fund a COLA increase; however, we did provide for a merit increase of up to 4 percent. He stated one of the areas we have tried to focus on is not the salary of the employee, but their net pay. He stated we have focused on the health insurance and looking at ways to reduce those costs by rebidding the provider contract. He stated he is hopeful that there will not be a change in the health insurance costs this year. Mayor Umstattd stated she appreciates the Town's employees sticking with us through this tough time. She stated a citizen recently told her that in the private sector he has not seen a raise for a couple years and appreciates the Town's employees' willingness to go without raises as he is. She stated he further related that once the economy recovers he hopes they will receive more pay as he hopes to in his job. She stated he had no hostility towards the employees, rather he has an appreciation for the job that they do. Vice Mayor Umstattd stated the private company she works for had a speaker who stated ~~Trust saves time and money". She stated in thinking about that she stated the Town is in such good hands with Mr. Wells and the way he manages the budget and she appreciates that we are in a really good place as a Town. She stated a $600 increase in her County taxes would be equivalent to her Town tax levy so Council has a lot of hard work ahead in this budget. Further, she stated it would be useful if we could correlate the average utility fund increase so we could determine what needs to decrease with the general fund tax rate to reach an effective rate of zero for both. Council Member Reid asked if the bequest for Balch or the Dominion Power settlement funds are included in the preliminary budget. Mr. Wells stated neither of those have been included at this time. He stated by policy those are one time revenues and need to be used for one-time expenditures. He stated there is a way to set up the Balch bequest funds as an endowment so that the interest earnings could be used to offset direct operational costs. He stated this is a discussion Council will be able to have once the final bequest is received. Council Member Reid asked if the establishment of an endowment would restrict where the funds could be invested. Town Council Work Session of January 25, 2010 Page 9 Mr. Butts stated he is not sure of the extent to which it would be subject to the State's public investment law. Council Member Reid stated he believes using it for debt or capital project at the library or even using some for operational costs would be beneficial. He stated at some point we need to have a discussion regarding the library and the fact that we will not receive County or State money. He stated we also need to discuss what to do with the Dominion funds as well. He stated he is concerned that the Uran Fund was a donation to the Town and the bulk of it went into items such as the ROCK program and we have a precedent for using private money to offset tax dollars and he does not see why it could not be done in this case as well. Mr. Wells stated that broader discussion will be brought back in a timely manner, likely for March. Council Member Reid stated it would be helpful to have this discussion for this budget. He stated he would like to give staff a raise as staff deserves a raise. He stated we have some fantastic people here. He asked the cost of a lpercent increase. Mr. Butts stated the cost would be approximately $200,000. Council Member Reid stated the fact that the employees are sticking it out is amazing, especially the police. Council Member Dunn stated there is a $500,000 increase in salary expenditures and asked what the increase is for as we are not giving raises. Mr. Wells stated two additional police officers were hired since the last budget approval. He stated also the amount accounts for in-grade progressions within the Police Department as officers work through the Master Police Officer program. He stated there is also a small amount for the grade progression within the Public Works Department. Council Member Dunn stated he concurs with Council Member Reid's comments regarding the desire for staff to receive a raise. He stated in any organization you don't have 100 percent of your employees as top performers and he would like to see information about performance measures and how those are determined. He stated it is unfortunate that all staff must go without a pay increase for employees who may not deserve a pay increase or may not deserve their work. He stated it could be that we have no lesser performers; however, it would be nice for those who deserve a raise to get one. Further, he stated he would like to see the performance measures at a future work session or during the budget process. Mr. Wells verified Council Member Dunn is referring to performance measures by department. Council Member Butler stated if no one is receiving a raise then the only things you could do with poor performers would be to give them a pay cut or to let them go. He stated the problem with letting them go is that unless you backfill them with a lesser paid employee; you have reduced services to our Town Council Work Session of January 25, 2010 Page 10 constituents. He stated if there is a performer poor enough to let them go you can do that, but that does not mean that we can have an unfilled position. He stated if we are going to give everyone a 1 percent raise that would be great, but he does not understand how than can be accomplished without reducing services to the Town or cutting back in efficiencies. Council Member Wright stated he is very supportive of staff, but is very mindful of what is happening in the real world. He stated one of the problems with providing a COLA or a merit increase is that it resets the expense at the higher level. He stated perhaps a use of the one-time funds would be a bonus program for strong performers, which would not commit the Town to the long- term recurring cost. Council Member Reid stated he could support this idea. Council Member Dunn stated as we get into the budget detail we may find that there are cuts that can be made that do not reflect in a reduction in service. He stated in the last budget Council Member Wright proposed $1 million in cuts that did not touch personnel and he proposed $2.4 million in cuts that did not touch personnel. He stated services do not need to be affected and some services are redundant and some services could be contracted out. Council Member Martinez stated he feels we need to set the tax rate for the residents and let the managers manage the budget. He stated he has brought up the idea of bonuses for high performers before and is not opposed to that discussion. He stated he is very supportive of doing everything we can for increases; however, we know what kind of economic situation we are in and he trusts Mr. Wells to make these decisions. Vice Mayor Hammier stated this is a good point and asked what cuts would be recommended to achieve $1.6 million in reductions so that we have zero carryover. She further asked what would be cut to have an effective tax increase of zero for the citizens accounting for the increase in utility rates and stated she does appreciate all of the hard work that Mr. Wells will bring forward. 2. Additions to Future Council Meetings Council Member Reid stated he would like to see a schedule of what is coming forward to Council similar to what was provided in the fall. He reminded Mr. Wells of Senator Warner's website and stated he hopes that staff will complete the form to request funding for the Sycolin Flyover before the deadline of March 1. Further, he asked that staff provide a memo regarding all of the efforts by the Town regarding undergrounding utilities. He asked that staff respond to the citizen regarding the two-hour parking zone proposal. Further, he asked for an update on the Core Business Center police program stating he has not seen officers walking around downtown. Council Member Dunn reiterated his request for information regarding performance measures and asked for additional information as to how they relate to our projects; time limits for Planning and BAR. 3. Closed Session On a motion by Council Member Martinez, seconded by Council Member Butler, the following was proposed: Town Council Work Session of January 25, 2010 Page 11 MOTION Pursuant to Section 2.2-3711(A)(1) of the Code of Virginia, I move that the Leesburg Town Council convene in a closed meeting to hear and discuss the Town Manager's evaluation and contract. The motion was approved by the following vote: Aye: Butler, Dunn, Hammler, Martinez, Wright and Mayor Umstattd Nay: None Vote: 6-0-1 (Reid abstaining) The Council convened in closed session at 8:25 p.m. The Council reconvened in open session at 9:04 p.m. On a motion by Mayor Umstattd, seconded by Council Member Martinez, the following was proposed: MOTION In accordance with Section 2.2-3712 of the Code of Virginia, I move that Council certify that to the best of each member's knowledge, only public business matters lawfully exempted from open meeting requirements under the Virginia Freedom of Information Act and such public business matters as were identified in the motion by which the closed meeting was convened were heard, discussed or considered in the meeting by Council. The motion was approved by the following vote: Aye: Butler, Dunn, Hammler, Martinez, Wright and Mayor Umstattd Nay: None Vote: 6-0-1 (Reid absent) 4. Adjournment On a motion by Council Member Martinez, seconded by Council Member Butler the meeting was adjourned at 9:05 p.m. 2010 tcwsmin0125 Clerk of C nci