MINUTES LAKEWOOD CITY COUNCIL AND LAKEWOOD REINVESTMENT AUTHORITY JOINT STUDY SESSION. 6:00 p.m. August 24, 2015
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1 MINUTES LAKEWOOD CITY COUNCIL AND LAKEWOOD REINVESTMENT AUTHORITY JOINT STUDY SESSION 6:00 p.m. Minutes are not a verbatim transcription, but rather an attempt to capture the intent of the speaker by the City Clerk. ITEM 1 CALL TO ORDER Mayor Murphy called the meeting to order at 6:00 p.m. in the Council Chambers, Lakewood Civic Center, 480 S. Allison Parkway, Lakewood, Colorado. ITEM 2 ROLL CALL Those present were: Mayor Bob Murphy, Presiding Shakti Ramey Johnson David Wiechman Adam Paul Karen Harrison Tom Quinn Scott Koop Cindy Baroway Pete Roybal Absent: Karen Kellen Staff in attendance: Kathy Hodgson, City Manager Nanette Neelan, Deputy City Manager Tim Cox, City Attorney Full and timely notice of this Study Session had been given and a quorum was present. ITEM 3 PRESENTATION 2015 REVISED/2016 CITY OF LAKEWOOD BUDGET Mayor Murphy recognized members of the budget and audit committee, Tim Dennis, Donald Tallman, and John Ludwigson.
2 Minutes Page 2 Finance Director Larry Dorr gave a PowerPoint presentation covering the 2015R/2016 proposed budget. The presentation included savings due to the City s effort to go more paperless; the many budget activities/meeting dates; introduced the members of the Budget & Audit Committee; and he reviewed the process for the meeting. Mr. Dorr reviewed the economic forecasts; stock market instability; stable interest rates; Marketplace Fairness Act known as the Remote Transaction Parity Act (internet sales) and how they impact interest rates and Lakewood s revenue growth. Most of the presentation was surrounding the General Fund, as it is the one Fund with the most spending flexibility. General Fund is 68% of all funds and 32% are Restricted Funds. Dorr reviewed the 2014 General Fund Audit which showed the TABOR refund, which is an offset to Revenue. Staff saved up to 6% and there was a transfer of funds for the Plaza in the amount of $1,400,000. Bottom line revenue is $4,602,000. Sales Tax Revenues is over budget: at $3,989,000 at 7.3%; Building Material Tax is $1,647,000 at 74%; and Permits $980,000 at 33%; 2014 Total Revenue growth was 8.1% TABOR Limit is 3.501% and refunded at $5,200,119. Forecasting and budgeted for TABOR refunds will be happening in this year s budget. General Fund breakout for 2014: Sales/Use Tax 66%; Charges 11%; Property Tax 7.3% Franchise Fees 6.2% Intergovernmental income 4.6% other 4.8% (nothing more than 2% in that category). He discussed Lakewood economy and showed the many construction projects in Lakewood: Hyatt Hotel, FirstBank Headquarters, Belmar apartment complex; Westerra Building, 268 unit apartment complex on Colfax, Zephyr Line apartment complex, apartment complex north of union, Sprout groceries, Qdoba Headquarters and store, Colorado Christian University, and Terumo BCT. Professional economist s numbers from Governor s Office: Forecasted States sales tax revenues at 4.6% ; %; CPI % and CPI % Colorado Legislative Council 5.5% 6.0% 1.4% and 2.6%. Nearly 5% of General Fund revenue is car sales. Sales tax on motor vehicle use tax derived on where you buy it. Dorr reviewed 2015 year to date finances. Sales Taxes: 4.5%, motor vehicle use tax 12.3%, licenses & permits -6.9%, building material use -21.4%, total revenues, (-0.1%), total expenditures 2.3%. Estimates for General Fund: sales tax, 2015, 2.9%, 2016, 4.0%; property taxes.2015, 7%, 2016, 7.5%; motor vehicle tax 2015, 10%, 2016, 3%; total revenue 2015, 3.1%, 2016, 3.4%; TABOR LIMIT (forecast) 2015; 3.3%, 2016, 2.8%.
3 Minutes Page 3 General Fund Expenditures: Capital outlay.5%, services and supplies 25%,operating personnel 74.5%. New expenses: Microsoft office 365 $400,000, Police Staffing: $975,000, Building Plan Review $200,000. Dorr explained the General Fund and the TABOR Revenue Limits. Mark Pray, Chief Information Officer Information Technology gave an overview of IT Strategy, IT Governance, and new cloud-based Office 365. Kevin Paletta, Chief of Police gave an overview of Police Staffing Study and Analysis; background accreditation; study methodology. He described steps moving forward and outcomes utilized to improve efficiencies which include increasing staff, realigning beat boundaries and updating scheduling. Jay Hutchison, Director of Public Works gave an overview of Development Process; building permits increase, new dwelling units, staffing changes, counter plan reviewer, building plan reviewer, on call part-time plan reviewer, plan review by contract; now available on-line; payment for permits & contractor registrations, some permits applications, contractor registrations. Mr. Hutchison described the three phases of the City of Lakewood campus development and the projects involved. Mr. Hutchison spoke on the sidewalk projects occurring on the west side of Sheridan. Kit Newland, Director of Community Resources gave an overview of capital projects completed at several different city parks. Ms. Newland described other capital projects such as community centers, partnerships with schools, and recreation center works. Dorr Mr. Dorr stated the budget requirements are all being accomplished. He explained the core community values of Lakewood and the upcoming budget activities. Murphy confirmed with Director Newland that the work completed on the Carmody Recreation Center was not all completed under the ownership of the City of Lakewood. Newland confirmed Mayor Murphy s statement by stating that is correct. Dorr- explained the business changes, funds, and spending with the different departments within the city. Councilor Paul asked if the increase in the self-insurance was being used to create reserves. Dorr explained the non-departmental fund and what those funds are used for.
4 Minutes Page 4 Councilor Wiechman asked if the city employees will obtain a pay increase while the police agents will get a lower pay raise. Dorr explained that the forecasted budget for 2016 has non-sworn employees obtaining a 3.5% pay increase while the sworn employees will obtain a 2.9% increase. Wiechman stated he believes that the sworn staff should be at least receiving the same pay increase as civilian employees. He also stated this pay increase can be discussed at a later date. Murphy explained that there is an ordinance that helps keep good care of the police agents pay. He also overviewed the taxes involved with the city budget and described where the taxes go. Mr. Murphy stated the City of Lakewood is a low tax environment. Councilor Baroway asked if the $800,000 grant the city received for sidewalks was included in the $1,000,000 budget that was stated previously for sidewalk projects. Dorr stated that the $800,000 was included in the previously stated $1,000,000 budget for sidewalks. Baroway asked if the other $200,000 was being utilized for the Sheridan sidewalk projects. Hutchison explained yes, the $200,000 was a part of the Sheridan projects. Paul asked when the self-insurance numbers would decrease and when a point of savings would been reached. Dorr stated that the budget allows for a decrease in spending over the next 12 months and the success of the program is evaluated after five years. He explained that during the five year span, a team meets every quarter to look at trends and opportunities for savings. Paul asked about the attrition when referring to the hiring of 8 new police agents. Paletta stated that there has been a 5% attrition rate and there is a committee that meets regularly to discuss the current state of attrition. Dorr explained that the two academies a year process has helped the attrition rate become more stable. Councilor Harrison asked why the sidewalks project costs are higher than normal.
5 Minutes Page 5 Hutchison stated that the Sheridan sidewalks project area is more expensive due to the physical conditions of the properties and the acquisition of property rights. He also explained the sidewalks are larger to ensure safety of people using the walks. Harrison asked what the average cost is for a sidewalk project per block. Hutchison explained it is difficult to have a number figure on an average cost on an even grade sidewalk due to side projects that arise during construction. Harrison commented that the first year of the self-insurance program may look bad but the 2 nd, 3 rd, 4 th, and 5 th years will look better due to savings. Councilor Shakti asked how the City of Lakewood compares to other permitting offices. Hutchison stated that there is not an extensive survey done to see how long the wait time is for other jurisdiction s permit counters. He explained that four weeks is a time period where people seem to be comfortable. Shakti asked what the different options for how the TABOR rebate could happen. Dorr explained that the current plan to refund the revenue surplus to the residents of Lakewood is through the property tax. He stated that this is a cost efficient way to get the residents of Lakewood their money. Councilor Quinn thanked staff for their work on the budget. He stated he was happy with the Sheridan sidewalks project happening. Hutchison stated the city keeps projects in mind for a while which allows projects from the past to be completed. Quinn asked Director Newland about the operation and maintenance costs and the potential problem of receiving money from Jefferson County Open Space in the future. Newland explained open space revenues have increased and the county has looked at strategies to increase their funding of community projects. Quinn asked if there is any expected adjustments due to the recent flooding of Bear Creek Lake Park. Newland stated yes and that an additional $50,000 is expected. Johnson thanked Jay Hutchison with the permitting process and thanked staff for the self-insurance program. She also thanked Kevin Paletta for the hiring of new agents being in the budget.
6 Minutes Page 6 Baroway thanked staff for the budget presentation and their work. Shakti asked if a mulch facility was included within the budget. City Manager Kathy Hodgson thanked staff for their work. She stated staff can provide a comprehensive look on the compensation program. Ms. Hodgson proposed more funding towards a slash mulch facility, the playground program, and the median improvement program due to the amount in the city s reserves. She explained the total transfer from the reserves would be 2.6 million dollars. Murphy stated this process will include an analysis by staff to recommend what to do with these three projects Ms. Hodgson referred to previously. Mr. Murphy clarified that the slash mulch facility would be carefully placed in the city to not disturb a neighborhood or the residents. Paul Thanked Ms. Hodgson for the funding ideas. Koop asked about the median program and the money source for this program. He also asked about the Neighborhood Participation program and its involvement in medians. Hodgson stated the money would be set aside for medians and this is a new funding source. Murphy explained the Neighborhood participation programs have a maximum amount they can contribute. Quinn thanks Ms. Hodgson for the idea of a slash mulch facility. Shakti stated that the budgeting process is a group effort and the process helps understand the budget. ITEM 4 PRESENTATION 2015 REVISED/2016 LAKEWOOD REINVESTMENT AUTHORITY BUDGET Mayor Murphy thanked the candidates that were running for council for being at the meeting and learning about the city budget. Deputy City Manager Nanette Neelan Explained that the Lakewood Reinvestment Authority was approved by voters in 1997, the Mayor and Council serve as the board, and designated three reinvestment areas and projects. She stated the three areas include the West Alameda Corridor, Colfax Wadsworth Corridor, and the West Colfax Corridor. Ms. Neelan described the background of each of these three areas and stated when they were established. She stated the mission was to encourage private investment within targeted areas of Lakewood. Ms. Neelan explained activities that will
7 Minutes Page 7 occur as part of the project process. She stated how these projects have independent books and records for each project and staff is available for assistance. Ms. Neelan stated that the budget background includes tax increments and public improvement fees. She described the revenue and the percentages from where the revenue is obtained. Ms. Neelan explained the expenditures and the percentages from where the expenditures are obtained. She stated the 2014, 2015, and 2016 budget balances and ending fund balances. She stated that the LRA will be looking forward and proposing strategic opportunities. Ms. Neelan concluded the budget has been consistent with the previous years. Murphy thanked all staff and management team for the management of the city s finances and the preparation of the budget. He stated that the LRA will meet for an executive session in the City Manager s Conference Room. ITEM 5 REPORTS None. ITEM 6 ADJOURNMENT There being no further business to come before the Council; Mayor Murphy adjourned the meeting at 8:47 p.m. Submitted by: Margy Greer, City Clerk
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