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HomeMy WebLinkAboutTB Study Session 2010-07-23 Town of Estes Park, Larimer County, Colorado, July 23, 2010 Minutes of a Study Session meeting of the TOWN BOARD of the Town of Estes Park, Larimer County, Colorado. Meeting held at Town Hall in Room 130 in said Town of Estes Park on the 23rd day of July, 2010. Board: Mayor Pinkham, Trustees Blackhurst, Elrod, Ericson, Koenig, Levine and Miller Also Attending: Town Administrator Halburnt, Deputy Town Administrator Richardson, Directors Goehring, Joseph, Kilsdonk, Kufeld, McFarland and Zurn, PIO Rusch, Town Clerk Williamson Absent: None Mayor Pinkham called the meeting to order at 8:05 a.m. FIVE-YEAR ECONOMIC OUTLOOK Finance Officer McFarland provided an overview of the current economic climate. After the market crash of 2008/2009, people are paying down debt, borrowing down 6.4%, consumer spending continues to be down and the jobless rate is not rebounding quickly. Estes Park continues to fare better than most mountain towns; however, the town is down 12% from 2007. The local real estate market may have reached bottom and real estate continues to hold its value. The construction segment remains down. 2010 YEAR TO DATE REVIEW/FORECAST/REDUCTIONS Finance Officer McFarland reviewed the year-to-date sales tax report that demonstrated each month except January has been down in 2010, with the year 5.5% behind 2009. Last year’s numbers were behind 1.5% in May and ended 4.6% down for the year. He stated the decrease has flattened out; however, he does not anticipate a complete turnaround in 2010. 2011 BUDGET GUIDANCE Project Prioritization Exercise Administrator Halburnt reviewed the results of the project ranking for 2011. The transportation hub, fairground parking lot lighting and landscaping and the Bond Park Master Plan were the top three projects followed closely by the Multi Purpose Event Center (MPEC). Discussion on the ranking followed: Trustees Blackhurst and Miller stated they ranked items higher that had grant funding such as the transportation hub and Moraine Avenue streetscape; ranking certain items such as the MPEC without the pro forma was difficult; and Trustee Elrod stated the Board has a responsibility to maintain Town owned property such as the barns and museum storage facility, and therefore, these items should be ranked higher. The Board discussed the need to replace the current barns; the potential uses and grant fund options for the MPEC if the transportation hub was built around the facility; the town needs a sales tax generator in the community such as the Conference Center even if it is a loss leader run by the Town; the Board should consider a professional pro forma/market study for the MPEC during the upcoming budget process; and the Town needs to provide quality stalls in conjunction with the new grandstand to bring shows to town. The Board consensus was to move forward with a professional pro forma/market study for the MPEC to be completed by October 2010. Town Board Study Session – July 23, 2010 – Page 2 Budget Format Finance Officer McFarland stated the budget format would be similar to last year with a couple of modifications. The Museum and Senior Center funds would merge with the CVB fund and change the name to Community Services Fund. The Advertising and Visitors Guide departments were discontinued and replaced by the LMD for payroll. The Fire Services Fund was eliminated and replaced by a transfer to the new Fire District. The Fire Pension Fund assets were transferred to the new Fire District. New GASB 54 rules have created new fund and fund balance definitions requiring the Town to report funds differently in the future. Special Revenue Funds such as the Community Reinvestment Fund will be merged with the General Fund; however, it would appear as a separate fund balance. Internal Service Funds such as the Catastrophic Loss and Medical Funds would be merged with the General Fund. These line items would be annotated to identify the funds as restricted funds. Trustee comments included the addition of the previous year’s budget numbers for line items and the addition of pagination for the 2011 process. Available Revenue/Financing Options Finance Officer McFarland stated Jim Manire/Financial Advisor recommended staff meet with Rick Buddin/Bond Attorney to discuss financing options. The Town may not have enough time to consider non-voter approved financing options such as Certificates of Participation (COPS). The current COPS rate is 4.5% for 10 years. The Town would have an available fund balance of approximately $1.6 million at the end of 2010 plus $434,000 in funds held for SOPA. Town Owned Parcels Review Administrator Halburnt presented the Board with a list of Town owned parcels. Trustee Elrod stated there may be opportunities to develop or sell property the Town owns that may have a better or higher use. He stated it would be beneficial to know the development potential of the properties and whether or not any property has restrictions related to its use. Community Reinvestment Fund Transfer Finance Officer McFarland reviewed the transfers to the Community Reinvestment Fund for the past few years, 2008 - $650,000, 2009 - $500,000, 2010 - $800,000, demonstrating there has not been any consistency. The amount transferred appears to be dependent on whether or not there are projects to be completed. Administrator Halburnt stated the Board committed to transferring the realized saving from the formation of the Local Marketing District (LMD) in 2010; however, it would be difficult to continue this transfer without affecting fund balance in the future. The Board discussed the issue and comments are summarized: the Board needs to determine the results of the November election before making a decision; the public was assured the funds saved by the formation of the LMD would be used on tourist related infrastructure and the $800,000 should be transferred to CRF; and the Town continues to spend more on operations and less on capital. The draft budget should be completed with the assumption of transferring $800,000 in 2011. Target Fund Balances Fund balances are discussed each year during the budget process. The current fund balance for the General Fund continues to be 30%, Special Revenue Fund maintain a balance of 1% or less and Internal Service Fund balances are designed to replace fixed asset needs. Trustee Ericson stated a number of communities are increasing fund balances given the current economy. Trustee Blackhurst stated the Town has $3 million in reserves to be used during an economic downturn to balance the budget and maintain the level of services. Trustee Elrod commented on the need for staff to review how additional funds can be cut from the budget including items like coffee, water, meals before Town Board meeting, etc. The Board discussed meals and beverages before meetings and concluded meals prior to meetings were appropriate. Trustee Town Board Study Session – July 23, 2010 – Page 3 Elrod also questioned whether or not a party was the appropriate way to thank employees for their efforts. Employee Compensation and Benefits Administrator Halburnt stated the preliminary number for health insurance is a 38% increase because the Town has reached 105% of claims for this year as of June. The Town would look at different insurance models; however, this may be the year to look at self insurance and utilize the Catastrophic Loss Fund as a stop gap. The Board discussed potential raises for employees in 2011. Comments are summarized: employees have full employment including benefits and without improvements in the economy the Town would be criticized for any increase; what is the cost of living in Estes Park; how would an incremental raise equate to the purchase of a bag of groceries; the Board stated during the 2010 budget process that employee salaries would be reevaluated this fall if revenues turned around; a 1% one-time bonus pool may be appropriate for 2011; and employee salaries should be compared to private sector salaries as well as governmental entities. Administrator Halburnt stated a 1% raise or merit pool would equate to $100,000. The Town currently uses 6 target cities (3 mountain resort and 3 regional) when reviewing salaries. POTENTIAL IMPACTS OF 101/60/61 Finance Officer McFarland stated the potential impact to the General Fund in 2010 could be $400,000 and the impact by 2014 would be $600,000. The affects to the utilities is unknown but would most likely increase utility rates significantly. Staff would create an addendum to the budget to address budget impacts if the issues are passed by the voters in November. The utilities have HDR developing a cost analysis for both electric and water if the issues pass. POTENTIAL REVENUE SOURCES Administrator Halburnt reviewed potential revenue sources including a temporary increase or a permanent sales tax increase to complete projects or pay for future infrastructure. Finance Officer McFarland stated the state and county have eliminated the vendor discount for collecting sales tax and recommended the Town consider eliminating it as well. This would be a saving to the Town of approximately $230,000. The Board agreed staff should investigate rescinding the rebate. Director Zurn provided background on the current status of the drainage master plan which identified close to $8 million in improvements needed to address concerns related to federal regulations. In addition, the Town has been diverting funds for the maintenance of roadways for the past 13 years and roadways throughout town are failing. Reconstruction of roadways is significantly more expensive than maintenance. Staff has discussed a potential Stormwater and Streets Utility with the Board in the past to generate revenue to address these concerns. Board discussion was heard and summarized: would be in favor if a mechanism existed to rebate the fee to low income households; the issue is a valley wide concern and should be paid by all households; can the fee be assessed to households in the county; need to educate the citizens as to why the additional fee and what it would be used for and what would happen to the current infrastructure without the new revenue source; and a presentation by Director Zurn at an upcoming Town Board meeting with public comment on the issue. Staff would produce a schedule on how to move forwarded with a potential new utility and fee structure. Town Board Study Session – July 23, 2010 – Page 4 MISCELLANEOUS. Trustee Elrod would encourage each department to look for opportunities to cut training costs by sending staff to webinars and to send only one person to training. Director Zurn stated the beetle issue would continue to grow in 2011, and therefore, additional funds would need to be budgeted if the Town continues to enforce the beetle ordinance. There being no further business, Mayor Pinkham adjourned the meeting at 11:45 a.m. Jackie Williamson, Town Clerk