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HomeMy WebLinkAbout2010-10-25 City Council Minutes Approved GST Y Off' ooR Council Study Session Minutes—October 25, 2010 At approximately 7:30 p.m. Mayor Maxwell called the regularly scheduled Anacortes City Council study session of October 25, 2010 to order. Councilors Kevin McKeown, Erica Pickett, Brad Adams, Bill Turner, Cynthia Richardson and Brian Geer were present. Nick Petrish was excused. Council Budget Review Council continued its review of the proposed budget for 2011 focusing on Public Works. Finance Director Steve Hoglund said the public hearing on the budget was scheduled for the regular City Council meeting of November 1, 2010 and that Council would then adopt the budget via ordinance at the November 15 regular meeting as well as voting on the property tax levy for 2011. On a separate issue, Mr. Hoglund advised that Standard and Poor's would be visiting the City on Wednesday morning, October 27, and that a conference call was scheduled with Moody's on November 1 in order to get two ratings before the upcoming revenue bond issue for the water treatment plant upgrade. Mr. Hoglund advised that the bond sale would likely take place on Wednesday, November 10, and he suggested calling a special City Council meeting at 2:00 p.m. that day for Council to approve the bond ordinance. Mayor Maxwell added that Councilors could vote by phone for that special meeting. Mr. McKeown asked if the special meeting could be scheduled at noon due to a conflict with a meeting of the roundabout art committee. Mr. Hoglund said he would verify the time but that financial adviser Susan Musselman had suggested 2-3 p.m. due to the time difference with Minneapolis where the bonds will be sold. Mrs. Richardson suggested that the Council does not normally allow remote voting but could authorize it specifically for the November 10 special meeting by taking action to do so at the regular meeting on November 1. Mayor Maxwell agreed. Public Works Director Fred Buckenmeyer began the budget review with the Street Maintenance Fund (104). Under expenditures, he explained that the$50K line item for Professional Engineering Services in 2010 was due to the trestle and 6th Street projects and that the 2011 budget of$10K is more in line with past years. He also pointed out$10K budgeted for the crack sealing program. Mrs. Pickett asked if the $30K line item for Operating Supplies included asphalt. Operations Manager Sandi Andersen said it included rock, asphalt, cold mix, and all other street maintenance supplies but not extended sections of street overlay. Mr. Geer asked if any of the 2010 Professional Engineering Services for 6th Street would be reimbursed. Mr. Buckenmeyer said no, only the trestle engineering was reimbursed. Mrs. Richardson asked how the public can find out if a particular street is on the maintenance list. Mr. Buckenmeyer turned to the $0 line item for Street Overlays item on the last page and explained that the last few years all street funding has been spent on a few large projects but once Pennsylvania Avenue is finished in 2011 that line item will be returned to the budget for overlays again. He added that the City will begin receiving mitigation payments from the Port of Anacortes for the prilled sulfur operation and said staff will recommend devoting that revenue to street maintenance as well. Mr. McKeown asked how much of the $30K Operating Supplies had been spent on gravel for Pennsylvania Avenue. Ms. Andersen said that amount isn't tracked separately but the crews are out there at least once a week. Mr. Turner asked if the Port's mitigation funds could only be used on roads traveled by the prilled sulfur trucks. Mr. Buckenmeyer said he will recommend no such restrictions. Mr. Geer noted that Fund 104 experienced significant electricity savings in 2010 and asked why that line item had not been reduced in the 2011 budget. Ms. Andersen said that line item is for street lights and the budget is conservative because of unknown variables. Mr. Geer asked about the 2010 actual expense of $26K for Debris Removal— Maintenance Shop. Ms. Andersen explained this was largely for disposing of street sweeper debris which was moved to the Solid Waste Fund for 2011. Mr. Buckenmeyer turned to the Arterial Street Construction Fund (105). He explained that the $250K line item for Fidalgo Bay Road Reconstruction is all pass through money that will be reimbursed from a grant and the $620K for Pennsylvania Avenue will complete that project. Under Revenue, Mrs. Pickett asked about the $464K actual 2010 revenue for US FHWA 32nd St Const/Design. Mr. Hoglund explained that this was a miscoding to an incorrect BARS number and is actually the 6th Street expenditure that was reimbursed by the ARRA grant, not 32nd Street. Mr. Buckenmeyer continued under expenditures noting the budget line items of$285K for the SHIP Interpretive Trail and $75K for the Guemes Channel Trail Phase II which will fund permits and plans for a westerly extension of that trail. Mrs. Pickett commented Anacortes City Council Study Session Minutes October 25, 2010 1 she was thrilled to see trails budgeted in the Arterial Fund. Mrs. Richardson asked if the SHIP trail will also receive funding from the Parks Foundation. Mr. Buckenmeyer deferred to Mr. Hoglund. Mr. Hoglund said that budget line item did not reflect private or foundation funding, only REET I and impact fees. Mrs. Richardson agreed but said the public should recognize the significant contributions made by volunteers and donors to that project. Next Mr. Buckenmeyer addressed the General Fund (001), Public Works tab. He said the only significant change there was a wage increase because Facilities had been moved to Public Works from Parks. HE said everything else remains neutral from 2010. Turning to the Sewer Fund (440) expenditures, Mr. Buckenmeyer noted the $132K line item for I & I Reduction which will concentrate in 2011 on the L Basin which is south of 12th Street between 0 and R Avenues. Mrs. Pickett clarified that I & I is inflow and infiltration, to repair leaking sewer lines. Mr. Geer asked about the $1 K line item budgeted for Repair and Maintenance Supplies compared to the $25K actual expense in 2010. Mr. Buckenmeyer said $1 K is more typical for the past few years and that the 2010 actual figure was large because of the pump that went out at the ferry terminal pump station. Pointing out the $34K budgeted for incinerator fuel Mr. Buckenmeyer commented that the wastewater plant operators have won just about every prize they can get and they just keep reducing the amount of fuel they use. He commended them for their efforts. Mr. Turner asked about the difference between the $264K budgeted for electricity compared to the $186K actual expense in 2010. Mr. Buckenmeyer said the budget reflects a 3% increase in electric rates. Mr. Turner asked if the County energy consultant can help the City cut electricity costs. Mayor Maxwell concurred and said the City has saved a tremendous amount of energy already in 2010, down 16% in the first eight months not including the treatment facilities. Mayor Maxwell thanked all the City staff who have worked hard and thought of ways to save energy and the resulting costs, including taking advantage of new technology and grant funding. Mr. Turner suggested that Federal stimulus money could have a huge impact if directed at small scale energy efficiency projects. Continuing with expenditures, Mr. Buckenmeyer pointed out the $145K line item for the Aeration Blower and said the City may get a PSE grant to reimburse part of that and that the project will result in net energy savings. He noted the$700K budgeted to replace the heat exchanger and said MWH is under contract right now to design that. He said the $145,500 budgeted for PLC migration project will be the final phase of that project. Noting the $695K line item for Sewer Revenue Refunding Bonds he added that those bonds will be paid off in 2013. Mr. Turner asked when the wastewater treatment plant will have to be replaced or overhauled. Mr. Buckenmeyer said the City will have to replace parts but the plant has sufficient capacity for the City's projected build out. Mayor Maxwell added that Department of Ecology recently re-rated the plant for 30% more capacity based on its current operation and said the City shouldn't need to replace the facility for at least another 20 years. Mr. Buckenmeyer next addressed the Water Fund (401). He observed that this fund includes the water treatment plant, the distribution system, and metering and billing. Mr. Geer asked about the $100K budget for Water Rights Appeal— Matter#65. Mr. Buckenmeyer said the BARS account titles are not entirely accurate and that those line items basically cover legal matters for the water system; he gave some recent examples. Mr. Geer asked if the BARS titles can be fixed to clearly indicate what the money is for. Mr. Hoglund said additional BARS numbers can be added but that creates an even more complex expenditure report and that the legal department has used these BARS numbers for years to account for a variety of legal matters. Mrs. Richardson asked if the titles could simply be changed. Mr. Hoglund agreed. Mayor Maxwell clarified that the first line item is used for the ongoing water rights appeal on which the City has intervened with the Swinomish and is waiting for a ruling and the Skagit County Skagit River Project line item is used for the ongoing metering project the City participates in along with the County and the PUD. Mr. Turner observed that the City has been studying its water source for many years and is constantly working and investing to protect the environment and the water resource. Mr. Buckenmeyer noted the $25K line item for Water Rate Study and explained 2011 will be the beginning of a new three-year rate cycle. He noted the$20K line item for the Comprehensive Water Plan which is updated every five years and may be completed in 2010 or may carry over into 2011. He noted a separate $20K line item for the Co-ordinated Water System Plan which is a county-wide effort that is a couple of years overdue now but has been pending due to the ongoing appeal of the 2006 water rights ruling. Mr. Buckenmeyer said the $1 M line item for Sed Basin & Filter Addition is a cash flow place holder for the new water treatment plant and advised that a budget amendment will occur when the actual cost Anacortes City Council Study Session Minutes October 25, 2010 2 of the project is known. He said the $120K line item for Water Line Replacements is for small mains replacement and was moved from a different BARS number. Finally, he said the $500K for Padilla Bay 36" Pipeline is for easements from the Swinomish tribe near the casino. Mrs. Pickett asked about the $5K line item for PW Advisory Board Legal Assistance. Mr. Buckenmeyer said he would look into it. Mayor Maxwell advised that something was miscoded there. Regarding the $50K line item for Repair and Maintenance Supplies for the water treatment plant Mr. Buckenmeyer said this was a lot more than the 2010 actual but in keeping with the average for the preceding few years. Mr. Buckenmeyer pointed out the $1 M budgeted for electricity at the plant and said it is a 3% increase over the 2010 budget. Mrs. Richardson asked if the new plant will be more efficient. Mr. Buckenmeyer said that is the plan but until the plant is in full operation in its new configuration the exact energy requirements won't be known. Regarding the $25K line item for Distribution System Security, Water Treatment Plant Manager Jamie LeBlanc explained this is for security at the reservoirs and pump stations. He added that the $50K line item for the Intake Eductor is to add some grinder pumps to replace 1970-vintage equipment that clogs the intake system. Mr. Buckenmeyer said the $100K line item for Reservoir Internal Maintenance is an estimate for required maintenance at all three reservoirs. Mr. Geer asked about the $40K actual 2010 cost for Laboratory Equipment. Mr. Buckenmeyer said this was actually for remodeling the lab at the 3MG reservoir where asbestos was discovered and had to be removed. Mrs. Richardson asked about the $80K line item for Fidalgo Bay Estates Gen Set. Mr. Buckenmeyer said that is to add a generator at the small reservoir at Fidalgo Bay Estates and that the City will attempt to recoup that cost via rates charged to the customers served by that reservoir. Moving on to the distribution system, Mr. Buckenmeyer noted the $30K line item to Re-Build Cla-Valves which he said happens once every five years. Mr. Turner asked why the $112K budgeted for insurance is over twice the 2009 actual cost. Mayor Maxwell explained the system hadn't been evaluated for a number of years and was recently adjusted. Mr. Buckenmeyer said the 2010 budget for distribution mains went from $365K to $0 only because it was relocated to a different BARS number. Mrs. Richardson asked why Full-time Capitalized Labor went from $0 in 2008 and 2009 to $82K for 2011. Mr. Hoglund explained that these expenses are capitalized as assets at the end of every year and the expense account is zeroed out. Under water transmission system, Mr. Buckenmeyer said the North Texas Road waterline replacement was budgeted and begun in 2010 but may complete in 2011. Turning to the Sanitation Fund (450), Mr. Buckenmeyer called this fund healthy and said the only noteworthy item is debris removal: as discussed earlier in the evening, the street sweeper debris disposal has been moved from the Street budget to the Sanitation budget. He added that $20K is budgeted for scheduled dumpster replacement. Mr. Geer asked why there was no dumpster replacement expense in 2010. Mr. Buckenmeyer replied that it occurred but hadn't been posted yet. Mrs. Richardson complimented the tidy and attractive appearance of the turquoise dumpsters used at festivals and events. Mr. Buckenmeyer next addressed the ERR Fund (501). Mrs. Pickett asked for an explanation of how the Equipment Rental fund works. Mr. Hoglund explained that when equipment is purchased it is put on a depreciation schedule and the department that uses it pays into the ERR fund each year to build the capital reserve back up to replace the item when necessary. Mr. Buckenmeyer said the big line item in this fund for 2011 is $412K for new vehicles, primarily a street sweeper and three new police patrol cars. Mr. Geer asked what will happen to the old sweeper. Ms. Andersen said the City will try to sell or trade it. Mayor Maxwell added that once a vehicle is declared surplus the City wants to get it off the books so it no longer has to be insured. Mr. Turner asked about extending the lifecycle of the police cars. Mayor Maxwell said that by the time the City replaces a patrol car it has 100K miles on it and really needs to be replaced. Mr. Turner asked if it is typical to replace three cars in a year. Mayor Maxwell said the City normally replaces two or three of them each year on a seven year rotation. In the Storm Drainage Fund (445) Mr. Buckenmeyer pointed out the $20K line item for NPDES [National Pollutant Discharge Elimination System] Permit compliance adding that this year that budget item had been increased to include some education and outreach. He said the $15K line item for Professional Engineering Services is a catch all for miscellaneous engineering projects in minor amounts and noted that the City performs engineering in house when it can to save funds. Regarding the $200K line item for Flounder Bay Dredging Phase II, Mr. Buckenmeyer said that is entirely reimbursable from the private slip Anacortes City Council Study Session Minutes October 25, 2010 3 owners. Mr. Turner pointed out that only the hard costs are reimbursed and the City has provided a lot of staff time. Assistant City Engineer Matt Reynolds explained that the $96K line item for Misc Storm Sewer Upgrades includes two projects: trash racks at 24th Street and J Avenue near Youth Dynamics and also the Windsor Street outfall in Skyline which gets clogged and causes flooding. In response to a question from Mr. Geer, Mr. Buckenmeyer clarified that the $96K line item budgeted in 2009 for Storm Sewer Improvements was for Pennsylvania Avenue storm improvements and will be used in 2011. Mr. Reynolds added that the City is applying for a pass through grant of approximately$115K for storm drainage projects. Mr. Buckenmeyer said the $50K line item for Storm Drain Outfall Reconstruction will likely be used at the Fidalgo Bay Road project. The$60K line item for Lower Marine Drive Water Quality will cover work that doesn't get completed in 2010. Turning back to the Parks/Rec/Cemetery section of the General Fund (001), Mr. Buckenmeyer said this section is handled differently than in prior years and covers facilities maintenance at City Hall and the Senior Center which is now under Public Works rather than Parks. He called attention to the $68K line item for Building Repairs which is to paint the exterior of City Hall and the $38,500 line item for elevator Maintenance & Repairs which is for elevator renovation at City Hall. Mayor Maxwell said there are some structural issues at City Hall that need to be addressed as well and said the painting may or may not be able to happen in 2011. There being no further business, at approximately 8:43 p.m. Mayor Maxwell adjourned the regularly scheduled study session of October 25, 2010. Anacortes City Council Study Session Minutes October 25, 2010 4