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HomeMy WebLinkAboutMINUTES Town Board Study Session Budget Meeting 10-20-2006 Town of Estes Park, Larimer County, Colorado, October 20, 2006 Minutes of a Regular meeting of the TOWN BOARD BUDGET STUDY SESSION of the Town of Estes Park, Larimer County, Colorado. Meeting held in the Municipal Building in said Town of Estes Park on the 20th day of October, 2006. Committee: Mayor Baudek, Trustees Blackhurst, Eisenlauer, Homeier, Levine, Newsom, and Pinkham Attending: All Also Attending: Town Administrator Repola, Finance Officer McFarland, Recording Secretary Roederer Absent: Town Clerk Williamson Mayor Baudek called the meeting to order at 8:30 a.m. He notified those present that meetings regarding the Wilderness Act will be held as follows: October 24, 2006 at 2:00 p.m. in Senator Allard’s office; October 25, 2006 at 10:00 a.m. with Senator Salazar in the Loveland Council Chambers. 2007 & 2008 BUDGET PRESENTATION — GENERAL FUND AND RELATED FUNDS Administrator Repola stated an initial draft of recommended salaries will be ready for the budget study session on November 3, 2006, and will include information on how proposed cuts or reductions will affect the General Fund. Trustee Pinkham requested the budget worksheets show summary-level information from the prior two budget years, as well as the current year, in addition to the proposed budget figures. Administrator Repola stated that information would be available at the next study session.  Museum — Director Kilsdonk reviewed the museum scope of services. There are no proposed staffing increases. One seasonal employee is proposed, not one F.T.E. Operations expenses reflect plans to paint the hydroplant, purchase a plotter in conjunction with the Community Development department (each department will pay half of the $8,000 total cost), and install a sign at Highway 36 and 4th Street to help museum visitors find the building. The museum fund and hydroplant fund will be combined into one fund for future years; this is a housekeeping change. Although the 2008 budget currently shows $0 in federal grant monies, staff will have a fundable project and apply for grant funding prior to 2008. In regards to staffing, Administrator Repola stated all departments will begin showing all staffing as F.T.E.s, including seasonal staff.  Senior Center — Director Mitchell reviewed the Senior Center scope of services. The Town budget supports basic services; staff at the Senior Center collaborate closely with the friends group, EPSCC, which raises funds for specific major projects. No staffing increases are proposed. There has been no increase in the cost of the food-service contract since 2003. The proposed 2007 budget for O&M reflects $12,000 in building improvements to meet safety guidelines, as recommended by CIRSA. A food-proofing cabinet will be purchased in 2007, as recommended by the Health Department, through the use of outside funding sources (Senior Center, Inc. and a grant from the County). Trustee Pinkham expressed concern that the ending fund balance in 2008 would be close to zero. Administrator Repola stated the O&M balance may be increased to provide a 5% ending balance in 2008. The target is to have no less than 5% remaining, depending on what the transfer from the General Fund is for a given year. If savings in expenses provide a larger balance, the remaining funds may be carried over and used in future years. Senior Center, Inc. is a separate, private, non-profit Town Board Budget Study Session — October 20, 2006 - 2 group. Projects funded by Senior Center, Inc. and the related income and expenses for those projects are reflected in the Senior Center budget so costs can be tracked.  Convention & Visitors Bureau, Special Revenue Fund #222 — Director Pickering reviewed the history of the development of the CVB and provided current statistics on advertising, contacts, and visitors. Revenues increased $100,000 last year and will increase by $200,000 this year. The General Fund transfer request is increasing by $50,000 for 2007 and $50,000 for 2008. The salary for the CVB Director is being reallocated to the five CVB accounts (Communications, Visitors Center, Tourism Development, Group Sales & Marketing, and Special Events) to more accurately reflect their involvement in the different areas of the CVB.  CVB Communications Fund — Manager Marsh stated increases in 2007 O&M reflect a projected costs for a redesign of the brochure that is distributed at visitors centers across the state. The costs for advertising media (print, radio, and television ads) are increasing. The costs for the toll-free information line have been moved to the CVB fund. No increase in staffing is proposed.  CVB Visitors Center Fund — Director Pickering stated revenues nearly doubled between 2005 and 2006; moderate revenue increases are anticipated in 2007 and 2008. Start-up expenses for the new CVB building are decreasing. No capital projects are planned other than a push-button to provide handicapped access through the doors. Costs for maintaining the CVB website are shown in the visitors center O&M budget. Staffing is proposed to increase in 2007 by 0.50 F.T.E. for a visitor information specialist and by 0.50 F.T.E. for an administrative clerk. Trustee Eisenaluer stated ambassadors’ hours have increased in 2006 due to the number of visitors at the CVB, and the ambassadors have requested the Town provide additional staff as well. It is important that ambassadors not become burned out. The addition of a half-time visitor information specialist would help reduce the load on volunteer ambassadors, including providing extra coverage during midday when staff and ambassadors are trying to work in lunch breaks. Dir. Pickering stated the half-time administrative clerk would be responsible for creating and maintaining contacts with CVB stakeholders, increasing membership and sales. This position is currently outsourced at a cost of $32,000 per year. The cost of a 1.0 F.T.E. administrative clerk, including benefits, would be approximately $40,000/yr. That person would work to increase visitors center revenues from $200,000/yr. to $300,000/yr. Discussion followed regarding the impact on the General Fund of hiring additional personnel and whether an increase in CVB revenues would offset these costs. Mayor Baudek called a ten-minute recess at 8:55a.m.; the meeting reconvened at 9:05 a.m.  CVB Tourism Development Fund — Director Pickering stated $8,000 in 2007 and 2008 will be received from Platte River Power Authority for economic development. Expenses for education and training, member dues and subscriptions, and marketing expenses have been moved from the General Fund account Business Development to the CVB Tourism Development fund beginning in 2007.  CVB Group Sales and Marketing Fund — Director Pickering stated group sales and marketing has an expanded role, including providing leads and referrals for local businesses. The 2007 O&M budget reflects $20,000 in anticipated costs to produce a new brochure.  CVB Special Events Fund — Director Pickering stated fairground revenues are projected to increase in 2007 and 2008. Special Events contributed $10,000 Town Board Budget Study Session — October 20, 2006 - 3 toward the fireworks display in 2006 and budgeted $30,000 for 2007. There is some debate regarding who should be responsible for paying for the fireworks display. No additional staffing is proposed. Although budgeted repair and maintenance costs double from 2006 to 2007, this is primarily a contingency budget—if the funds are not needed, they are removed from the budget during mid-year budget revisions. The 2006 purchase of trophies and awards should provide an approximate three-year supply. Budgeted Rooftop Rodeo expenses increase from $49,000 in 2006 to $76,000 in 2007 and $79,000 in 2008 due to the expiration and subsequent increase of the contract cost for stock contractors; this increase has been long anticipated. No capital equipment purchases are planned for the next few years.  CVB Conference Center Fund — Director Pickering stated an error was made in entering revenue figures for 2007 and 2008; they should show an additional $21,000 in each budget year. Staff will correct this error. In 2007, $150,000 is budgeted as a capital expense for new carpet and replacement of chair cushions at the Conference Center, and $20,000 is budgeted as an O&M expense for repainting. Per the Town’s agreement with the Holiday Inn, these sixteen-year-old items must be replaced. Trustee Pinkham questioned whether a capital replacement fund should be created to plan for replacement and repair at the Conference Center, CVB, fairgrounds, etc. Discussion followed regarding spending reserves down for special projects.  CVB Budget, general discussion — Trustee Blackhurst questioned why the CVB budget shows an overall increase in expenses of 13% from 2006 to 2007. Director Pickering noted the increased costs for capital projects, fireworks, the rodeo stock contract, and conference center improvements. Finance Director McFarland stated the General Fund Business Development account, with expenses of approximately $100,000, had been moved to the CVB beginning in 2007.  Transportation — Administrator Repola stated an additional shuttle bus route may be added in 2007 to pick up additional riders from the campgrounds on Spur 66 and at Mary’s Lake Campground. Shuttles may also run on fall weekends beginning in 2007. Estimated cost is $50,000 with a net increase of $38,000 is shown in 2007 to cover this cost; these monies come from the General Fund. At this time, there is no direct revenue source to offset these costs. Trustees expressed general support of the shuttle bus service.  Light and Power — Director Goehring provided a brief history of this enterprise fund, noting that the Mary’s Lake substation, which was built in 1976, has substandard capacity for current and future demands and creates a bottleneck in the system. The substation was designed for a 10 megawatt load; the current load is 20 megawatts. HDR is working on a financial plan for enlarging the Mary’s Lake Substation—the plan, which will increase capacity at the substation to 50 megawatts, should be complete by January 2007. The O&M budget for 2007 shows a one-year increase of $340,000 to cover the engineering costs of the substation master plan. The upgrade will be completed in phases. The O&M budget also shows in increase of $25,000 beginning in 2007 for the Intergovernmental Agreement (IGA) with the City of Loveland for electrical engineering services. Through cost savings over the past few years and modest rate increases in 2006 and 2007, the L&P fund balance is close to the target of $2.9 million. Budgeted expenses in 2007 and 2008 mirror those in 2006 except for improvements in the power distribution system as follows: approximately $4 million for the substation improvements, $2 million to address distribution bottlenecks, and $400,000 for design and construction management. Discussion followed regarding necessary reserves and the debt service ratio needed for bonding. A capital expenditure of $260,000 is budgeted in 2007 to replace a twelve-year-old bucket truck. Finance Director McFarland stated almost every Town Board Budget Study Session — October 20, 2006 - 4 Town department will need to double their vehicle replacement fund budget, which is projected out twenty years. Staff will provide details on the vehicle replacement fund issue at a future budget study session. Two projects are planned in 2007 to place power lines underground—one along Dry Gulch Road and one in conjunction with the Mary’s Lake Road bridge replacement project that Larimer County is working on.  Water — Director Goehring stated that in 2002 the Town’s water treatment capacity was at 90%. Projections are that by 2010 the Town won’t have the capacity to meet demand. EPA and Colorado Department of Health regulations are becoming increasingly difficult to meet. HDR is updating the master plan that identifies distribution and plant weaknesses. A $4 million bond is reflected in the 2008 budget to expand and upgrade the Mary’s Lake water treatment facility; the proposed upgrades will allow the plant to continue to meet EPA guidelines. The Mary’s Lake plant was chosen for expansion rather than the Glacier Creek plant because of the fire danger and structural defects at the Glacier Creek plant. The expansion will provide a capacity of 4 million gallons per day; current capacity is 2 million gallons per day. The build-out of the Estes Valley may exceed the Comprehensive Plan estimates due to the high number of condominiums being built. The water treatment demand at build-out was originally estimated to be 6 million gallons per day; current estimates are as high as 9 million gallons per day. Planning expansion of the building for capacity further than 30 years in the future is not wise because of aging/deterioration of the building over that period of time. The bond for the upgrade will be for approximately $3.5 million; upgrades should be complete by early 2009. Administrator Repola noted that by providing large capacity expansion through debt, the beneficiaries of the expansion (future homeowners) pay for the costs. Other O&M expenses include approximately $70,000 in 2007 to demolish the Big Thompson water treatment plant that was abandoned in 1992 and replace it with a small building to track volume; approximately $350,000 for design and construction management of the Mary’s Lake treatment facility spread over 2007 and 2008; and purchase of two vehicles that fall within the vehicle replacement policy.  Information Systems Technology — Director Goehring stated this is an internal service fund to support the Town’s network and information systems, including printers, copiers, phones, Board Room equipment, computers, software licensing, etc. Most costs are totaled and then divided by the number of users and billed per department. New computers are paid for by individual departments. Town policy specifies computer replacement every four to five years, with the exception of police department notebook computers, which are on a three- to four-year replacement schedule. No capital expenditures are planned for 2007/2008. No change in staffing levels are proposed. The O&M budget figure for data processing in 2007 was incorrectly entered as $4,000—it should be $14,000. Staff will correct.  Contingencies — Administrator Repola stated the Mayor’s Contingency Fund is proposed to stay at $100,000 in 2007 and 2008. The fund is used to cover costs of items/events that were not budgeted for (such as the new visitors center opening event in 2006); the Mayor decides whether funds from this account should be used. The community reinvestment fund is healthy—no transfer is recommended for 2007; $650,000 is budgeted in 2008. Accumulated depreciation for vehicle replacement may need to double beginning in 2008 in the General Fund only. The final transfer of $200,000 to EPURA will occur in 2008, per the IGA. Miscellaneous: Finance Director McFarland stated that the highest fund balance between 2001 and 2006 was $7.4 million in 2003. Projected expenses as a percent of total revenues in Town Board Budget Study Session — October 20, 2006 - 5 2008 are less than they were in 2001. Capital reinvestment expenditures have increased from between 7% and 8% to between 30% and 50%; these funds are being used to benefit the community directly. Administrator Repola noted that transfers in 2008 are projected to be 106%, which is deficit spending. Trustee Pinkham stated revenue projections are fairly conservative. Town Administrator Repola provided an overview of proposed compensation for 2007. He stated one-third of General Fund revenues were used for salaries in 2006; this could increase to 43% in 2007. He proposed 3.0% for merit increases, 0.5% for one-time bonus awards, and no COLA increase, with pay increases to be based strictly on performance. The future Deputy Town Administrator will do a community evaluation on pay grades with non-local comparisons for positions that require special certification or licensing. No movement of pay grades would take place until the comparison is complete (probably August 2007). The cost of benefits in 2007 will increase by approximately 11%. A memo on salary proposals will be distributed for the next budget study session. Staff will incorporate changes discussed in today’s meeting and provide new summary sheets for the next budget study session. There being no further business, Mayor Baudek adjourned the meeting at 11:58 a.m. ___________________________________ Julie Roederer, Recording Secretary