HomeMy WebLinkAboutTB Budget Study Session 2014-10-03
Town of Estes Park, Larimer County, Colorado, October 3, 2014
Minutes of a Regular meeting of the TOWN BOARD BUDGET STUDY
SESSION of the Town of Estes Park, Larimer County, Colorado. Meeting
held at Town Hall in said Town of Estes Park on the 3rd day of October,
2014.
Board: Mayor Pinkham, Trustees, Ericson, Holcomb, Koenig,
Nelson, Norris and Phipps
Attending: All
Also Attending: Town Administrator Lancaster, Finance Officer McFarland,
Directors Bergsten, Muhonen and Winslow, Manager
Fraundorf and Town Clerk Williamson
Absent: None
Mayor Pinkham called the meeting to order at 8:30 a.m.
2015 BUDGET PRESENTATION
Finance Officer McFarland provided a review of the General fund and stated the Town
Board has determined a 25% fund balance would be appropriate. The 2015 budget has
been prepared with a 23% fund balance, not including the required Tabor reserve of
approximately $403,284. The 2014 revenues are projected to exceed the original
budget by $385,000 to $8.15 million and the 2015 revenues budgeted at $8.4 million, a
3% increase over 2014. Flood recovery efforts continue to present challenges in
relation to cash flow because the Town must pay for expenses up front and wait for
reimbursements by FEMA, State and others. The Board requests a monthly update
on the flood expenses and reimbursements to review the fund balances
throughout the year. Staff would keep the board informed on the status of
reimbursements and fund balance. Staff and the Town Attorney continue to work with
the Town’s insurance broker in relation to medical insurance rates, which are estimated
to increase by 30%. The 2015 budget contains a 25% increase which is reflected in all
the department’s personnel budget line item. The new Event Center would be fully
operational in 2105 with an annual operating budget of $750,000. The center would
operate at a loss, requiring an increase in the transfer from the General fund.
A number of cost-saving measures were taken to maintain the General fund balance at
or near 25%, including each department and fund cutting operational funds, in
aggregate totaling nearly $1,500,000, elimination of the 2% merit pool, reduction of
money collected from services charged by Information Technology and Vehicle
Replacement funds, reduction of the transfer from General fund and Community
Reinvestment fund, and delaying of maintenance/efficiency related projects. Finance
Officer McFarland stated that the budget would operate $900,000 in the red for 2015.
The philosophy moving forward would be to cut back on expenses over the next couple
of years to get back to a balanced General fund and meet the 25% reserve. The 2015
budget includes the results of the market rate compensation study conducted in
June/July, compensation adjustments from last year’s study not fully implemented and a
few compression issues.
Town Administrator Lancaster stated the 2015 budget was established by each
department requesting all needed and projects, and then were requested to cut the
department budgets to meet the 25% fund balance in the General fund. This allowed
Administration to understand each department needs moving forward. Administration’s
goal for 2016 is to present the Board with a balanced budget. He stated the importance
of following the compensation policy established by the Town Board in 2013, and
therefore, funding the market increases for 2015 outlined in the compensation study.
The Community Service grants have been reduced by 5% in an effort to focus funds on
Town programs. Services for 2015 would remain static with the proposed budget. He
Town Board Budget Study Session – October 3, 2014 – Page 2
stated a General fund balance of 25% would be a healthy fund balance and stated the
Town should not let the balance drop below 10%. The Town’s financial position after a
major disaster has only dropped by 2% over the past year. He reminded the Board and
the citizen the new sales tax collected by the Town has been earmarked to specific
objectives and all funds collected would be placed in one of four newly created funds.
Trustee Ericson questioned when the Community Service fund would be consolidated
into the General fund. He also stated concern with permit fees for outside entities that
affect the revenues of Town departments such as Community Development. Finance
Officer McFarland stated staff would merge the funds prior to the budget review in
November.
Mayor Pinkham called a break at 9:35 a.m. and reconvened the meeting at 9:45 a.m.
COMMUNITY REINVESTMENT FUND
Finance Officer McFarland commented transfers out of the General fund account for
25% of the expenses in the fund. The transfer to the Community Reinvestment fund
would decrease with the street improvement funds moving to the new Street fund. Staff
recommended decreasing the transfer from the General fund to the Community
Reinvestment fund from $800,000 to $520,000 to cover the Certificate of Participation
loan payment. Community Service fund transfer would increase from $1.7 million to
$2.1 million in 2015 to cover the new Event Center operations. The General fund would
transfer $30,000 to the Emergency fund for the new radio station in order to install and
have the station operational by the end of the year. The Emergency fund would repay
the General fund in 2015.
It was noted by staff that the $800,000 transfer from the General fund to the Community
Reinvestment fund has taken place since the Local Marketing District was formed. No
formal Board action was taken to mandate the transfer in the future, and only
statements were made suggesting the marketing funds saved with the creation of the
Local Marketing District could be used for infrastructure improvements for tourist based
improvements. Administrator Lancaster stated conditions change over time and the
Town now needs those funds to operate programs or cut operational expense further to
transfer funds for potential improvements.
Trustee Ericson stated with the formation of the Local Marketing District the Town
agreed to set aside the funds saved on marketing for infrastructure. He agreed a policy
was not adopted; however, the budgets along with the transfer were adopted each year
and it did become a part of the culture. He agreed the transfer could be lowered for
2015 with the understanding it would be increased in the future to the $800,000. He
requested a five year plan for the Community Reinvestment fund to review capital
projects. Trustee Norris stated support for the reduced transfer in 2015 with the
understanding the reduction would not be permanent.
Finance Officer McFarland reviewed the revenues and expenses in the fund: Revenues
include $520,000 transfer from the General Fund, $330,000 in grant funding, $4.2
million for the devolution of Hwy 34 business loop, approximately $1 million from the
sale of Lot 4, and $10,000 in investment income; Expenses include Elm Road landfill
mitigation of an additional $97,500 and a total project budget of approximately
$400,000, $4.4 million for the construction of the parking structure, $520,000 for the
Certificate of Participation payment for the Event Center and Pavilion, $771,528
transferred to the new Street fund, $398,550 for the Fall River trail, FLAP grant
expenses of $1 million, $165,000 Conference Center roof repair, and $30,000
Performance Park overlay. At the end of 2015 the fund balance would be $987,686
with $200,000 set aside for the museum storage facility and the rest of the devolution
funds of $3.1 million.
Mayor Pro Tem Koenig questioned how the Town would build the parking garage if the
bids for construction come in higher than the grant funds allocated for the project.
Administrator Lancaster commented the Town may need to consider value engineering,
requesting additional funding from the grantors, use of Lot 4 funds, or use of
Town Board Budget Study Session – October 3, 2014 – Page 3
contingency funds from the Event Center/Pavilion project. The Town has been able to
use grant funds for design development; however, if the Town does not move forward
with building the structure the Town would be required to repay the grant funds used.
Trustee Ericson requested the Board continue to discuss the need to set aside funds for
a second stall barn at the fairgrounds.
INTERNAL SERVICES FUNDS
MEDICAL
The fund maintains the medical premiums and fund balances as the Town moved to self
insurance in 2012. The 2015 budget contains a 25% increase in medical and no
increase in dental or vision premiums.
FLEET MAINTENANCE
The fund maintains all equipment and charges the appropriate department for the
services related to equipment owned and operated by the department. In 2015, the
division would focus on extending vehicle life for an extra year in lieu of the departments
contributing to the Vehicle Replacement fund in 2015. Revenues would remain flat in
2015, expenditures increase with the replacement of a floor lift, expand diagnostic and
training for the fleet staff, and personnel costs increase with the hiring of two vacant
positions in 2014. The fork lift would be removed from buildings and added as a
capital line item.
INFORMATION SYSTEMS TECHNOLOGY
Each department pays a fee based on the equipment the department utilizes (laptops
and computers, servers, audio and video components, software, copiers and telephone
components). The contributions by department would be reduced in 2015 by $100,000
and decrease the overall fund balance. An additional staff position has been requested
to continue providing customer service. The division continues to update, simplify,
consolidate and tune servers and network components to increase reliably and
decrease expenses overall. Mayor Pro Tem Koenig expressed concern over the
need to set aside funds for new updated accounting software.
Mayor Pinkham called a break at 11:15 a.m. and reconvened the meeting at 11:20 a.m.
VEHICLE REPLACEMENT
The Internal Services Fund maintains a fund balance for future vehicle purchases.
Contributions to the fund for 2014 were suspended from the General Fund, Special
Events and the Museum. In 2015 the General fund would contribute half of the
revenues required for depreciation of the Town’s fleet. Light and Power has increased
the replacement rate of their vehicles and thereby increase the contributions to the fund.
The Police vehicles are retained for five years. Beginning in 2014 old Police vehicles
would be assigned to officers as take home vehicles for transportation to and from work.
The vehicles would be maintained by fleet. Chief Kufeld stated the Police would extend
the life of the vehicles to six or seven years.
GENERAL FUND. Each fund was reviewed and requests for additional information is
noted below:
Legislative – In 2015 the budget reflects the new salaries for the newly elected
officials and the benefits elected. O&M increases with the shifting of board room
computers to this fund.
Judicial – The 2015 budget remains flat with no material changes over 2014.
Executive – The Assistant Town Administrator position would be filled in 2015.
The personnel and O&M budgets remain static.
Administrative Services – A special election has been budgeted for 2015 in
relation to broadband and the elimination of the restrictions outlined in Senate Bill
152. In lieu of additional staffing the department has requested funding for
contract labor and the purchase of NeoGov software to streamline the application
tracking process, decrease staff time and eliminate publication costs. Staff
Town Board Budget Study Session – October 3, 2014 – Page 4
removed funding request for document management, and the remodel of the
records room and the completion of the Administrative Services office. The 2015
budget increased training to the 2013 level.
Finance – Personnel costs decrease in 2015 due to staff changes. O&M costs
decrease overall with IT costs decreasing by $8,000.
Employee Benefits – This fund contains the homeownership program, tenure
awards, wellness program, post employment benefits and employee gatherings.
There are currently eight employees participating in the homeowner program with
four additional participants anticipated for 2015. The budget also contains an
increase in the number of eligible retirees for post-employment benefits. The
2015 also contains funds for an RFP for benefit consulting services and an
actuarial study for post-employment services.
The next Budget Study Session is scheduled October 10, 2014, 8:30 a.m. – 12:00 p.m.
There being no further business, Mayor Pinkham adjourned the meeting at 12:15 p.m.
Jackie Williamson, Town Clerk