Columbus, Georgia

Minutes



BUDGET REVIEW COMMITTEE

May 3, 2005



Members Present: Chairperson Evelyn Turner Pugh, Mayor Pro Tem John J. Rodgers

and Councilors R. Gary Allen, Wayne Anthony (arrived 3:30 p.m.), Glenn Davis,

Berry Henderson, Julius Hunter, Jr., Charles E. McDaniel, Jr., Nathan Suber and

Evelyn Woodson. Also present were City Manager Isaiah Hugley, City Attorney

Clifton Fay, Deputy City Manager Richard Bishop, Finance Director Angela Cole,

Assistant Finance Director Pamela Hodge, Clerk of Council Tiny Washington and

Deputy Clerk of Council Sandra Davis.



Members Absent: No one was absent.





Call to Order: Chairperson Turner Pugh called the meeting to order at 3:07

p.m. in the Council Chambers, Plaza Level, of the Government Center.



Invocation: Offered by Mayor Pro Tem Rodgers.







Opening Remarks:

Chairperson Evelyn Turner Pugh made some opening remarks, from a prepared

statement, regarding the proposed FY-06 budget process by highlighting the

challenges involved with balancing the budget and outlining the proposals that

would be considered for the City employees. She thanked the Finance Department

and all of those involved with the budget preparation. (A copy of the prepared

statement has been filed for the record.)



Proposed Recommended FY-06 Budget:

City Manager Hugley assured everyone that we will meet the challenges that are

demanded by the citizens of Columbus with the resources that we have

available. He then presented an overview of the Budget and is listed as

follows:



BUDGET PROCESS:



? The budget must be submitted to the Council by the Mayor no less than 60 days

prior to each fiscal year

? The budget must include operating and capital expenditures accompanied by

revenues

? The budget must be made public by advertising in the newspaper and hearings

must be held for public comment

? The budget and the millage rate ordinances along with related ordinances must

be approved by July 1



BUDGET PROCESS SCHEDULE:



MAY 2005

Budget Hearings for Council Review

JUNE 2005

Notices in the newspaper for public comment

First Reading of the Budget Ordinance

?Public hearing

Second Reading - Budget Final Approval





JUNE 2005

First reading of the Tax Millage

?Public Hearing

Second reading of the Tax Millage

?Final Tax Rates

JULY 1, 2005

Fiscal Year begins



*** *** ***



THE FY-06 PROPOSED BUDGET:



OPERATING FUNDS



Revenues $177,153,722

Expenditures $184,548,971

Difference ($7,395,249)



FY-06 OPERATING FUNDS:



Fund Revenues Expenditures Differences 2005 Budget % Change

General $119,444,915 $124,596,813 $ (5,151,898) $120,934,554 3.03%

Sewer 3,526,152 3,526,152 - 3,626,496 -2.77%

Paving 11,320,660 11,320,660 - 11,524,171 -1.77%

Medical Center 10,311,002 10,311,002 - 9,923,062 3.91%

Integrated Waste 9,124,455 9,124,455 - 9,323,416 -2.13%

E-911 2,961,088 2,961,088 - 2,797,904 5.83%

Debt Service 5,922,205 7,811,905 (1,889,700) 8,663,464 -9.83%













METRA 4,772,083 4,772,083 - 4,635,387 2.95%

Parking Mgmt 320,737 349,824 (29,087) 330,565 5.83%

Trade Center 2,049,358 2,049,358 - 1,810,549 13.19%

Bull Creek 1,350,300 1,350,300 - 1,378,075 -2.02%

Oxbow Creek 562,022 562,022 - 572,069 -1.76%

Civic Center 4,672,457 4,997,021 (324,564) 4,136,800 20.79%

Economic Dev. 816,288 816,288 - 826,850 -1.28%

Total $177,153,722 $184,548,971 $(7,395,249) $180,483,362 2.25%



WHERE DOES THE MONEY COME FROM:



- Ad Valorem Taxes - 39.3%

- Commissions, Franchise and Other Taxes- Franchise Fees, Georgia Power, Atmos

? 12.87%

- Sales and Use Taxes ? LOST, Beer Tax, Wine Tax - 18%



- Business License Fees and Permits - 1.36%

- Fines & Forfeitures ? Court fines - 3.73%

- Service Charges ? Parks & Rec fees, Ambulance fees - 13.04%

- Other Governments - 3.12%

- Interest, Sales & Misc ? Interest Earnings ? 2.4%

- Transfers In ? Cost Allocation and Civic Center - 2.13%

- Fund Balance - 4.01%



WHERE DOES THE MONEY GO:



- Public Safety ? Police, Fire, Sheriff - 39.7%

- Criminal Justice ? Courts - 6.14%

- Debt Service - 4.47%

- Management Operations ? IT, Finance, HR, City Manager - 7.58%

- Mass Transit & Parking Mgmt ? METRA, Parking Garage - 2.65%

- Community Services ? Engineering, Inspection and Codes, Planning - 9.56%

- CIP ? Construction projects ? 1.7%

- Public Services ? Paving, Sewer, Landfill - 12.75%

- Non-Departmental ? Transfers, Contingency, Costs not associated with a

particular department - 4.23%





EXPENDITURE SUMMARY:



Personal Services - 62.05%

Operating - 34.10%

Capital - 2.15%

CIP - 1.70%



MILLAGE RATES BY DISTRICT FY 2006:





USD1 USD2 USD4

?General 8.18 6.72 6.55

?METRA 0.82 0.82 0.82

?Sewer 1.07 0.12 ------

?Paving 3.36 0.91 ------

?Med Center 3.00 3.00 3.00

?Econ. Dev 0.25 0.25 0.25

?Debt Service 1.23 1.23 1.23

?Sub-Total 17.91 13.05 11.85

?MCSD 23.37 23.37 23.37

?State 0.25 0.25 0.25

?TOTAL 41.53 36.67 35.47





HOW DID WE GET TO THIS POINT?:



? Economy

? Decline in Growth of the Property Digest

? Sales Tax Trend

? 9 mill cap

? Property Tax Freeze

? LOST not approved by majority of voters





THE ECONOMY:



? Sales Tax revenue has fluctuated

? Interest earnings have been down and continue to be down (affected by the

interest rate environment)

? Occupational Taxes were down (FY02 but coming back now)

? Franchise Fees were down (FY02 but coming back now)





ASSESSMENT OF PROPERTY



Fy98 - 7.00%

Fy99 - 4.88%

Fy00 - 9.37%

Fy01 - 5.22%

Fy02 - 3.12%

Fy03 - 3.47%

Fy04 - 4.13%

Fy05 - 3.04%

Fy06 - 3.25% (projection)



SALES TAX IN MUSCOGEE:

TOTAL TAX for Muscogee County ? 7%

?4% State

?1% LOST enacted with 9 mill cap ? 4/1/1976

?1% 1999 SPLOST/City ? ends 2008/2009

?1% 2004 SPLOST/MCSD - ends 2009





City Manager Hugley emphasized that the SPLOST is for capital only and cannot

be used for operations. He then made comments in reference to the sales tax

trend.



The 9 mill cap:



- millage rate limitation on ?ordinary current expenses?

- Put in place by a referendum which enacted a local option sales & use tax

(LOST) effective 4/1/1976.

- It applies to General Fund and METRA.



Property Tax Freeze:



- 40% Assessed

- 13,500 Homestead Exemptions

- 8,000 HTRC (Homeowner?s Tax Relief Credit) Exemption

- 16,500 households paying less than $50.00



City Manager Hugley briefly explained the different pots of money and

which ones could not intermingle.



FY-06 GENERAL ASSUMPTIONS:



? 3.25% projected growth in the property digest

? Value of one mill (Operating) = $3,437,001

? Value of one mill (Debt) = $3,888,440

? 9 mill cap on millage USD#1

? No millage increase from FY05

? 5% Pay Supplement to all qualified full time employees, 2.5 % to all

qualified part time employees and retirees

? $200 Additional supplement for all sworn Public Safety employees



What is in the FY06 budget for employees?

? 5% Bonus ($4.6 million) *

? City absorbs increase in Healthcare costs at an average of $250 per employee

($.6 million)

? Public Safety Additional supplement for sworn personnel ($.2 million)

? Total Benefit for Employees - $5.4 million



? *For Qualified Employees employed Jan 1, 2005



City Manager Hugley recommended that all eligible employees that were on

the payroll as of December 31, 2004 are eligible for the bonus, and to be made

available to the employees on July 29, 2005. Mayor Pro Tem Rodgers pointed out

that initially it was mentioned that there was a 2.2% increase in the budget

over last year, which translates to approximately $4.1 million and we are

allocating $5.4 million new dollars just for employee benefits. He said in

essence, our general operating budget for this year, without those, is less

than what it was last year. City Manager Hugley acknowledged that this is

correct. Mayor Poydasheff added that the pension fund is in very good shape.

He stated that we are at approximately $174 million, but our actuaries

anticipated that we would be receiving approximately 7.5% return. He said that

when we took a look at the economy, our return would be approximately 7%, which

means we had to include in our budget $1.9 million for the pension fund.



City Manager Hugley then provided different scenarios regarding the bonus

that would be provided at various levels of the pay scale, as well as, the

percentage increase that is involved.



At this time, City Manager Hugley continued with his presentation by

highlighting the general fund and briefly explaining the use of the fund.



GENERAL FUND:



Revenues $119,444,915

Expenditures $124,596,813

Difference ($5,151,898)



* General Fund ? accounts for normal ?day to day activities (i.e. police,

fire, public works, finance, recreation, jail, courts and general government)

Primarily funded from sales tax, property taxes and franchise fees



City Manager Hugley then briefly explained the difference of $5,151,898 in

expenditures that would be taken from the General Fund ? Fund Balance. He

projected that the FY-07 revenues would be in worst shape with general fund

revenue, because of the $119.4 million; $1.9 million was pulled from penalties

and assessment. He emphasized that the $1.9 million will not be there next

year, because it took a long period of time to build that fund up to that

amount; therefore, if we look to this same fund next year, it would have

somewhere around $300,000. in that fund. He projected that we would start off

in the hole in FY-07.



He also mentioned the inclusion of monies that were allocated for the

Civic Center that were not needed, because the Civic Center has performed

well. He explained that this money would be transferred in from the Civic

Center back to the General Fund and that is another $324,000. of that $119.4

million that is available this year in revenue that will not be there in

FY-07. He estimated that we would start the FY-07 budget year with $2.2

million or $2.3 million less that where we are now.



Areas for review to increase revenues:



?Criminal Law History Record Checks from $5/$10 to $20

?Criminal Record Expungements from $0 to $50

?Body Transport for surrounding counties from $75 to $150

?Toxicology/Autopsy Report from $0 to $65

?One-time transfers of $1.9M from Penalty and Assessment, $324,564 from Civic

Center



General Fund:





? Use of Fund Balance for the General Fund of $5,151,898

? Fund Balance for the General Fund will drop to an estimated 70.08 days



Councilor Allen asked that City Manager Hugley clarify the fund balance

days involved, at which time, City Manager Hugley explained that the current

fund balance is $30 million, which equates to 90 days and with the taking of

$5.1 million out of the fund balance would take us to 70.08 days.



City Manager Hugley outlined the reasons for



proposing a bonus to the employees versus a pay increase. He also provided

projections for the estimated fund balance needed to balance the budget, if the

same scenario was proposed for the FY-07 as presented in the FY-06 budget, it

would be $6.4 million. He explained that if this amount came from the fund

balance, this would take us to 50.4 days in the fund balance. He made these

points to emphasize that we cannot continue to do the same next year with no

new revenue.



In response to a question of Mayor Pro Tem Rodgers, City Manager Hugley

replied that in the bonus, there is FICA but no pension in the calculation for

bonuses.



General Fund - Highlights:



*Personnel $93,822,355 (75.3%)

?Employee Reductions of 129 full and part time positions

?Addition of Correctional Officers in July and January



**Operating $28,744,493 (23.1%)

?Hour reduction for Recreation Services, Aquatics, Cooper Creek

?No weekend funerals

?Longer response time to enforcement issues

?No longer mailing bid notifications unless a specialized service



Councilor Suber commented on the ten positions in the police department

that are unfunded. He made the observation that over the last ten years, those

ten positions have never been filled and there has been a constant vacancy rate

of approximately 21 to 22 officers per year. City Manager Hugley agreed that

over the last five years, there have not been less than 21 positions vacant on

any given day in the Police Department. Councilor Suber pointed out that

positions are not being eliminated, cut or personnel being reduced in the

Police Department. He explained that these are just vacant positions that

won't be funded. City Manager Hugley continued to clarify that the positions

would not be funded, and the chances are that those positions would not have

been filled in the FY-06 year anyway.



Mayor Poydasheff outlined the current vacant position status in the Police

Department and spoke of the high standards that are applied in recruiting new

applicants. Councilor Davis asked for the plan that has been put in place if

qualified applicants are obtained, at which time, Mayor Poydasheff maintained

that if qualified applicants are identified; then, the positions will be

filled, and we would come back to the Council to request a supplement or a

midyear adjustment.



Councilor Henderson contended that with reduced personnel, the citizens

would experience a lesser service than in the past. He then made some

additional comments regarding the personnel in the Police Department.



Regarding the reduction in recreation center hours, City Manager Hugley

suggested that the change in hours of operation occurs as early as May 23,

2005; since, the schools would be letting out on May 20, 2005. In reference to

comments made by City Manager Hugley on cemetery burials, Councilor Turner Pugh

requested a report that shows how much money the city would save by not having

cemetery burials on the weekends and how much it is costing us now.



City Manager Hugley then responded to questions regarding bid

notifications. Councilor Turner Pugh suggested that the administration send

some type of notification to the vendors to advise them that the procedures are

changing. She also asked that we check with the City?s IT Department about

creating a software program for email bid notifications.



Councilor Davis asked questions regarding the closing of the Super Centers

on Sundays. He suggested rotating days for maximum usage. City Manager Hugley

identified the usage of a survey conducted by Parks and Recreation to find out

which days and hours are most desirable for the citizens. Councilor Henderson

cautioned that there could be some problems with citizens in the other areas if

we start tailoring each Super Center?s schedule. He suggested that we have a

standard schedule across the board.



Regarding the bid notification, Councilor Henderson suggested that we do a

notification to all vendors that are currently enrolled in any type of service

that the City submits RFP?s for and advise them that the bid opportunities

would be posted on the City?s website.



Councilor Davis suggested polling all of the centers to see if the

citizens would prefer the center being open on Sunday rather than Friday. He

said that there should be a compromise in finding an appropriate time that

would work for everybody. City Manager Hugley advised that they would consider

both options and bring something to the Council in a future Budget Review

Session.



Councilor Allen expressed concerns with the loss of revenue to the

concession areas, at which time, Becky Glisson from the Department of Parks &

Recreation advised that there is only five hours a week difference because the

aquatics is going from 40 hours to 35 hours. City Manager Hugley went over the

proposed hours versus the current hours of operation.



City Manager Hugley continued with his presentation overview.



General Fund - Highlights:



**Capital $829,965 (0.7%)

?Parks & Recreation $385,800

?MCP $44,000

?Clerk of Superior Court $79,000

?Facilities Maintenance $130,000

?Special Enforcement $108,000

?Traffic Engineering $77,000

?Police $6,165

**CIP $1,200,000 (0.9%)

?Hope VI $1,454,325 (Balance funded out of General Fund CIP Contingency)



SPLOST CAPITAL EQUIPMENT





**Police $ 575K

?15 Pursuit Vehicles w/ Technology Package

?1 Harley Davidson Motorcycle

**Sheriff $111K

?3 Pursuit Vehicles w/ Technology Package





City Manager Hugley reported that in the Police Department and Sheriff?s

Offices, there is a balance left in the Special Purpose Local Option Sales Tax

from 1999, but all of the other areas have spent their money or is obligated.

He said that the Police Department would be using the balance of their SPLOST

dollars at $575,000. by getting 15 pursuit vehicles with technology packages

and one Harley Davidson Motorcycle. He reported that the Sheriff?s Department

has $111,000. left in SPLOST money and they would be getting three pursuit

vehicles with technology packages.



SEWER FUND



Revenues $3,526,152

Expenditures $3,526,152

Difference $0



**Sewer Fund ? accounts for activities that are restricted for stormwater and

drainage. Primarily funded from property taxes.

**Millage remains the same at 1.07 in USD#1, 0.12 in USD#2



- Capital - $43,000

- CIP - $422,740 (plus $465,448 out of Sewer Fund CIP Contingency)

?Hope VI Funding - $788,188

?Environmental Monitoring - $100,000



PAVING FUND:

Revenues $11,320,660

Expenditures $11,320,660

Difference $0

Paving Fund ? accounts for maintenance and improvements to roads and bridges.

Primarily funded with property taxes.

Millage remains the same at 3.36 in USD#1, 0.91 in USD#2

Capital - $1,148,300

*CIP - $723,172

?Hope VI Funding - $723,172



Medical Center Fund

? mills

? Proposed budget $10,311,002

? Medical Center - accounts for funding for indigent hospital care.

Primarily funded with property taxes

? Contract includes $500K of inmate medical expenses; any charges in excess of

this amount is split 50% with the City ? paid from General Fund Balance



Chairperson Turner Pugh emphasized that by law, the city has to give the

Medical Center the value of the 3 mills; even if, the city does not collect the

full value of that 3 mills.



Integrated Waste Fund:

Revenues $9,124,455

Expenditures $9,124,455

Difference $0



**Integrated Waste ? accounts for refuse and disposal services. Primarily

funded from user charges

**Residental Fee remains at $14/month

**Capital - $1,205,048 (plus $556,552 out of Integrated Waste Vehicle

Replacement)

**CIP - $800,000 (plus $500,000 out of Integrated Waste CIP Contingency)

?New Cell Construction $800,000

?Landfill Closure $500,000



E911



Revenues $2,961,088

Expenditures $2,961,088

Difference $0

E911 ? accounts for telephone subscriber surcharges and collection for

emergency dispatch. Primarily funded from land lines and wireless phone

charges

-General Fund Subsidy $365,000

-Proposed rate increase from $1.00 to $1.50 for customers only when Phase 2 is

completed in the summer and company can provide service



In response to questions from Councilor Suber regarding the implementation

of Phase 2, City Manager Hugley predicted that it would be this summer.

Councilor Woodson asked about the area coverage, at which time, City Manager

Hugley said that we would be able to locate cell phone users in the Muscogee

County jurisdiction.



Councilor Henderson asked about others living outside of Muscogee County

if they would be able to benefit from the service while drive in Muscogee

County, at which time, City Manager Hugley advised that he would have to check

into that matter.



Debt Service

Revenues $5,922,205

Expenditures $7,811,905

Difference ($1,889,700)



**Debt Service Fund-accounts for accumulation and disbursement of principle and

interest payment

**Debt Service Fund Balance will bridge the gap, but a millage increase may be

required in FY07

**GMA Lease for Fire Truck $262,292



METRA



Revenues $4,772,083

Expenditures $4,772,083

Difference $0



**METRA ? accounts for the operations of the public transportation system.

Primarily funded from property taxes, federal grants and service charges

**Millage remains the same at 0.82 for all districts

**Based on 25? fare increase for all routes

**Capital $957,597



Parking Management



Revenues $320,737

Expenditures $349,824

Difference ($ 29,087)



**Parking ? accounts for the operation of public parking and parking garages.

Primarily funded from parking fees

**Parking Management Fund Balance will compensate for the difference



Chairperson Turner Pugh requested that the Council be provided with an analysis

of why the parking garage is going to have to be subsidized in the amount of

$29,087.00



Trade Center:

Revenues $2,049,358

Expenditures $2,049,358

Difference $0

**Trade Center ? accounts for the operations of the facility. Primarily

funded from event proceeds and beer taxes ($760K)

**Capital - $109,256





Bull Creek/Oxbow Creek:

? Bull Creek - $1,350,300

? Bull Creek ? accounts for the operation of the Bull Creek Golf Course

? Oxbox Creek ? accounts for the operation of the Oxbow Creek Golf Course

? Oxbow Creek - $562,022

?General Fund Subsidy at $150,000



Civic Center Fund:

Revenues $4,672,457

Expenditures $4,997,021

Difference ($324,564)



**Civic Center ? accounts for the operations of the facility. Primarily

funded from hotel/motel taxes ($757K) and events proceeds

**Civic Center Fund Balance will bridge the gap, amount transferred to General

Fund

**Capital - $61,250





Economic Development:



? Budget - $816,288

? Economic Development ? accounts for .25 mills used for attracting quality

companies, broaden the tax base, job creation and retention

? Add provision to budget ordinance that Authority will receive what we

collect, not the value of the millage



City Manager Hugley concluded his presentation and advised that all of the

details would be provided at future budget meetings. Chairperson Turner Pugh

pointed out that the slides of the budget presentation would be provided on the

computer.



City Manager Hugley went over the budget review sessions schedule to be

held after the Council Meetings and are as follows:

*May 10, 2005

*May 17, 2005

*May 24, 2005

*May 31, 2005



At the request of Chairperson Turner Pugh, City Manager Hugley stated that

copies of the budget would be provided at the Chattahoochee Valley Library, the

Department of Finance and on-line at the city?s website by the end of this week.



Councilor Davis asked that if the citizens have any concerns, questions or

suggestions for areas of improvement, to contact him. Chairperson Turner Pugh

advised the public that when the budget ordinance comes on first reading; then,

the citizens would have an opportunity to speak.



There being no other business to discuss, this meeting adjourned at 4:35 p.m.







________________________

Sandra T. Davis

Deputy Clerk of Council

Council of Columbus, Georgia