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