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12/02/1991 City CouncilTHESE MINUTES SUBJECT TO DECEMBER 10, 1991 APPROVAL EDMONDS CITY COUNCIL 1 SPECIAL 1992 BUDGET WORK SESSION MINUTES December 2, 1991 The special meeting of the Edmonds City Council was called to order at 7:00 p.m. by Council Presi- dent Wilson in the Public Safety Building Conference Room, 250 5th Ave. North, Edmonds. PRESENT Jack Wilson, Council President Steve Dwyer, Councilmember Roger Hertrich, Councilmember William Kasper, Councilmember John Nordquist, Councilmember Jeff Palmer, Councilmember ABSENT Jo -Anne Jaech, Councilmember Mayor Larry S. Naughten STAFF Dan Prinz, Police Chief Buzz Buzalsky, Fire Chief Art Housler, Admin. Srvc. Dir. Gary McComas, Fire Marshall Mike Springer, Asst. Chief Councilmember Palmer distributed a memorandum to the Council concerning the Proposed 1992 Budget and read it into the record: On Saturday, November 23, 1991, the Edmonds City Council explained the severity of the budgetary crisis facing the region and our city, a situation only compounded by the failure of the EMS levy. We have done our best to make it clear that this government needs to be run on its revenues and not on its reserves, sufficient reserves be provided within the budget to weather unforeseen financial crisis, and that we provide for unforeseen opportunities. We gave budgetary direction to the Mayor and Staff that allowed considerable latitude in the revision of the 1992 proposed budget. Unfortunately, it has been made clear by the Mayor's budget memorandum distributed November 26, 1991, that the administration has been unable or unwilling to complete the task outlined by the Council. We requested the input of Mayor -elect Laura Hall, and received none. And so we must proceed. Proceed in the best interest of the city and provide the Administration with a budget figure within which they must operate. One which provides adequate reserve funds. One which reflects economic reality. To accomplish this task, I offer the following motion: COUNCILMEMBER PALMER MOVED, SECONDED BY COUNCIL PRESIDENT WILSON, TO MOVE FOR THE PASSAGE OF THE FINAL 1992 GENERAL FUND BUDGET OF $13,182,930 INCLUDING ACCEPTANCE OF THE MAYOR'S PROPOSED PROPER- TY TAX INCREASE OF 6%. A. AMENDING THE MAYOR'S PROPOSED BUDGET BY ACCEPTING THE PRELIMINARY IDENTIFIED CUTS OF $398,740 AND ORDERING THE ADDITIONAL CUTS OF $691,260 TO BE MADE BY THE MAYOR WITHIN THE UNCOMPLETED PORTION OF EXHIBIT A, (A TOTAL OF $1,090,000). B. THE SAVINGS FROM THOSE CUTS IS TO BE DISTRIBUTED $525,350 INTO THE GENERAL FUND RESERVE FUND AND $564,650 INTO THE COUNCIL CONTINGENCY FUND, RAISING THEIR BALANCES TO $703,770 and $750,000 RESPECTIVELY. C. DIRECTING THAT THE STAFF AND CITY ATTORNEY PREPARE THE NECESSARY DOCUMENTATION FOR INCLUSION IN PACKETS FOR THE TUESDAY, DECEMBER LOTH, 1991 CITY COUNCIL MEETING. Under discussion, Councilmember Palmer explained the effects of the motion. Councilmember Palmer noted the following: 1. It would decrease general operating spending by $1,090,000. This is a reduction of 4% ($563,510) from the 1991 budget and a reduction of 8% from the mayor's proposed 1992 budget. 2. It would increase reserve funds by $1,090,000. This is an increase of 202% over the 1991 reserves and an increase of 278% over the mayor's proposed 1992 budget. Provides a total of $1,700,680 in the reserves rather than the proposed $610,680. 3. It accepts the mayor's proposed property tax increase of 6%. Councilmember Palmer noted property taxes have not been raised in the last two years and the cumulative affects of infla- tion alone has well exceeded the 6%. 4. Past 106's from 1990 and 1991 remain untouched and available to the City Council should the economy and/or the financial condition of the city continue to weaken. Councilmember Hertrich asked Administrative Services Director Art Housler to identify all the reserves that are existing in the City at present time. Mr. Housler replied the reserves for all funds amount to $610,680. Mr. Housler noted these consist of General Fund ending cash Reserves, Financial Emergency Reserve Fund, Council Contingency Fund, and Hotel/Motel Tax Fund. Mr. Housler referenced the Budget Summary for 1992 and noted the Cumulative Reserve/General fund has an additional $250,000 reserve amount above the $610,680 previously discussed. Mr. Housler also no there is approximately $900,000 in the Park Acquisition Improvement fund, however, Mr. HoussIer pointed out this is strictly for capital projects. Mr. Housler noted there is $56,120 in General Capital Improvement fund and noted this money comes from interest earned in the 002 Fund, which is the Cumulative Reserve/Gen. Fund. Mr. Housler said this could be considered for other uses. With regards to the Equipment Rental Fund, Mr. Housler said the Council has the authority to use those reserves for other purposes. Mr. Housler said right now they are earmarked for replacement of equipment. Councilmember Hertrich asked Councilmember Palmer where the $691,260 which he is proposing be cut from the budget, will come from. Councilmember Hertrich asked Councilmember Palmer if he is pro- posing to allocate certain amounts for each department, and Councilmember Palmer said that would be up to the Directors. Councilmember Hertrich asked Councilmember Palmer what he felt the ef- fect would be as to the operation of the City if the the motion was adopted, and Councilmember Palmer said he expected the City would continue to operate efficiently. Councilmember Hertrich asked if the affect of motion would result in a reduction of personnel and Councilmember Palmer said it would be up to the Mayor and Staff as to the best way to approach the situation. Councilmember Palmer noted the affect of the motion would put the City's financial reserves where the authorities should be. Councilmember Hertrich said the people voted down EMS, and it was Councilmember Hertrich's opinion that the motion would in effect, reduce the services of the City in which the citizens are paying taxes for. Councilmember Palmer said that is not what he is proposing. Councilmember Hertrich said in effect, the City would be providing something the City voted against and taking away the necessary services in which they do want and pay taxes for. Councilmember Nordquist commented he didn't feel they voted against EMS, they just didn't vote for it.i Council President Wilson said he believes the budget reduction would not affect the services of the City. Councilmember Hertrich feels if the Council is going to propose a major change, they should be responsible for showing where the changes are to take place. Council President Wilson said the Department heads are more than capable of handling that task. Council) ember Dwyer asked what the motion would presume if the Mayor refused to make a recommenda- tion or to make the $691,260 in budget reduction. Councilmember Dwyer said the Mayor had an obligation to present a balanced budget to the Council, which he did, however, it went out of balance when the EMS levy failed. Council President Wilson said the Council is setting the budg- et in the proposed motion. Councilmember Palmer said the motion directs the Staff and City Attor- ney tolprepare the necessary documentation for presentation to the Council on Tuesday, December loth. Councilmember Palmer said the Council is free to pass the budget with the proposed dollar figure and revisit the distribution of that budget early 1992. Councilmember Dwyer asked if the Mayor refuses to accommodate the Councils' request, when will the City take up the subject again. Council President Wilson said it was his assumption the budget will be passed as Councilmember Palmer has suggested. Councilmember Hertrich asked Police Chief Dan Prinz what an 8% reduction would do the Police Department, and Chief Prinz said a reduction of personnel would occur. Councilmember Kasper noted the 8% is an overall reduction in the Mayor's 1992 Budget, and not specifically the Police Department. I Chief Prinz said an 8% reduction in the Police Department would result in a reduction of between 7 and 10 people. Councilmember Hertrich asked Chief Prinz how many Police Officers on the street would have to be reduced, and Chief Prinz replied at least 4 officers out of a total of approxi- mately;30 Officers on the street at present. Council President Wilson asked Councilmember Hertrich if he feels the City is having a financial problem, and Councilmember Hertrich agreed the City is experiencing a shortcoming. Councilmember said tlhe City has an obligation to provide Police and Fire first before EMS. Councilmember Hertrich said it is his opinion the motion is asking for a reduction of police and fire protec- t EDMONDS CITY COUNCIL MINUTES Page 2 December 2, 1991 tion in the City. Council President Wilson reitierated this is not the intent or the content of the motion. Councilmember Nordquist addressed Councilmember Dwyer's concerns on what happens next. Council - member Nordquist said if the Mayor refused to comply with the budget requests, the City Council may have to resort to allocating the percentages if the Council can't get off dead center. Coun- cilmember Nordquist said he would imagine it would be turned over to the Mayor -elect after the first of the year. It was Councilmember Dwyer's opinion the Council doesn't have a well thought out plan as to what would happen if the Mayor does not comply. Councilmember Dwyer said if the Council is going to make additional budget cuts, they should be responsible for allocating the cuts and take the heat for it. Councilmember Nordquist said the City has management skills which could be relied upon to make these decisions. Council President Wilson asked Councilmember Dwyer what his thoughts were as to what should be done with the budget and Councilmember Dwyer said he disagrees with not raising taxes, Council - member Dwyer said the City is in an economic crisis and this is the type of situation that neces- sitates a tax increase. Council President Wilson asked Councilmember Dwyer what else in addition would he suggest. Councilmember Dwyer said he disagrees with the definition of what it means for the City to be healthy with regards to the information Councilmember Palmer has provided to the Council in way of a memo and a proposed motion. Councilmember Dwyer feels the City is at a peri- od of concern, and not crisis. Councilmember Nordquist said some of the departments in the City over the years have added people they don't need, and City is at a point now where dollars have to be cut. Councilmember Kasper said the City cut reserves last year because of increased estimates of reve- nues which did not materialize, which resulted in lost ground. Councilmember Kasper said he believes the City is now having to recover those lost revenues, as well as 1991's apparent loss of revenues. Councilmember Dwyer inquired on the amount of funds collected from the EMS levy in 1991 and Mr. Housler replied approximately $350,000. Councilmember Palmer said the Country is in a recession, and to turn around and add the tax bur- den to people who are already pinched at the other end is not the responsible approach. Councilmember Hertrich asked how the City is going to react when there is an increased public safety problem due to the proposed police and fire reduction, and Councilmember Palmer reiterated all of the budget cuts would be disbursed through ALL departments, not just Police and Fire. Councilmember Palmer feels belt tightening could be accomplished throughout all the departments. Councilmember Palmer said the City will always keep public safety number one in mind and will continue to do so. Councilmember Hertrich asked for examples of budget cuts, and Council President Wilson said the Department heads are more than able to utilize their management skills in reducing their budget. Councilmember Wilson said that the City is in difficult times and it could be the City isn't managing the taxpayers money properly. Councilmember Wilson said he feels the City needs to do some belt tightening of its' own and he doesn't feel comfortable with raising taxes and imposing on the already overtaxed citizens. MOTION CARRIED WITH COUNCIL PRESIDENT WILSON, COUNCILMEMBER PALMER, COUNCILMEMBER NORDQUIST AND COUNCILMEMBER KASPER VOTING YES; COUNCILMEMBER DWYER, COUNCILMEMBER HERTRICH VOTING NO. Administrative Services Director Art Housler asked the Council if there are any sacred areas which shouldn't be considered in the budget reduction, and the consensus of the Council was all areas had to be reviewed. EMS Discussion The Council held a brief 15 minutes discussion on EMS. The Council discussed a possible vote by mail election and the associated costs, and Mr. Housler noted City Clerk Rhonda March gathered some information for the Council and will be meeting with Election Officials the week of December 8th. It was the consensus of the Council that the City Clerk should try and have that meeting sooner, and Mr. Housler said he would relay the information to the City Clerk. With no further business, the Council adjourned at 8:30 p.m. THESE MINUTES ARE SUBJECT TO DECEMBER 10, 1991 APPROVAL. THE OFFICIAL SIGNED COPY OF THESE MINUTES IS ON FILE IN THE CITY CLERK'S OFFICE. R ONDA MA C , C' Clerk EDMONDS CITY COUNCIL MINUTES Page 3 December 2, 1991 LARRY U91iTEN, MAYOR