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HomeMy WebLinkAbout04-09-19Minutes of the budget meeting of the Pulaski Town Council held at 6:00 p.m., Tuesday, April 9, 2019 in the Council Chambers of the Town Municipal Building at 42 First Street, N.W. In attendance were: Mayor: David L. Clark, presiding Councilmen Present: G. Tyler Clontz; Brooks R. Dawson; Gregory C. East; Joseph K. Goodman; Lane R. Penn; James A. Radcliffe Administration: Shawn M. Utt, Town Manager Staff David Quesenberry, Clerk of Council Rebecca Reece, Finance Director Chief Gary Roche, P.P.D. 1. Call to Order Mayor Clark called the meeting to order at 6:00 p.m. 2. Roll Call After the Call to Order, the roll of Council was taken. Present were Mayor Clark, Mr. Clontz, Mr. Dawson, Mr. East, Mr. Goodman, Mr. Penn and Mr. Radcliffe. With all members of Council in attendance, a quorum was present to conduct business. Following Roll Call, Mayor Clark asked Mr. Utt to proceed with the meeting. 3. Modification of the Agenda No modifications were made to the agenda. 4. Public Hearings 4a. Proposed Rates for Water Utility Service, FY 2019-2020 Mr. Utt noted there were three public hearings on the agenda and a budget summary update. The first hearing he began, dealt with the 4% across the board proposed increase in water rates. The Town had agreed to do at least a 3% increase as part of the Brookmont Project and since Davenport had recommended a 4% increase, the advertisement was made for 4%. He noted that Council needed to have a public hearing. Mayor Clark opened the public hearing concerning the proposed water increase at 6:01 p.m. There being no comments received, he closed the public hearing at 6:02 p.m. Mr. Utt said there were two averages used concerning utility rates. There was a standard rate of 5,000 gallons per month average used by agencies such as the Health Department and there was a real average of the system, which for Pulaski was 3,400 Page 1 of 7/April 9, 2019 gallons per month. The proposed increase in water rates would add about $0.93 per month for water service for the average Town of Pulaski customer. There being no comments or questions from Council, Mr. Utt continued on to the proposed rates for sewer service. 4b. Proposed Rates for Sewer Utility Service, FY 2019-2020 With respect to sewer rates, Mr. Utt proposed a 2% across the board increase per the Davenport recommendation. For the average Town of Pulaski customer using 3,400 gallons per month, the sewer increase would result in about a $0.90 increase per month for sewer service. Both increases taken together totaled a combined increase of approximately $1.83. Mr. Utt said that a public hearing needed to be held on the proposed rates and reminded Council that the hearing was on the proposed rates and was not a final action. Mayor Clark opened the public hearing on the proposed 2% increase in sewer rates at 6:03 p.m. There being no comments received, he closed the public hearing at 6:04 p.m. Mr. Utt asked if there were any questions. Mr. Penn asked when the increases would end. Mr. Utt replied that the Davenport study proposed five years of increases starting in 2015. Three years into the five year period, the plan was updated due to concerns from the auditors that the Town's sewer reserves were not increasing as they should. To meet this concern, two additional years of increases were proposed, placing the Town near year three of the revised recommendation. Increases for sewer he added went down to 2% this year and would drop to 1.5% next year; and to 1 % the year after. Mr. Dawson ventured that at the end of the five year period, bills would be $10-$12 higher than five years previously. Mr. Utt replied that water and sewer together would be about $12.42 over the five year span. Mr. Penn speculated that with water, sewer and garbage charges, average bills would be $110. Mr. Utt estimated that for the Town's average customer using 3,400 gallons, the bill would be approximately $87.00 with the proposed increase for FY 2020. Mr. Goodman said that part of the reason for the increases was the rise in the Town's costs as well as not fully funding the cost allocation plan. Realistically, increases of 1 %- 2% some years would help keep up with rising costs. Mr. Utt noted that Davenport initially had recommended a 22% increase which was not realistic, so they put together a five year plan for 4% annual increases for five years. Smaller increases he observed, kept Council from having to approve massive increases in rates. Mr. Penn asked if James Hardie was the only big user the Town had. Mr. Utt replied they were the biggest user by far with the hospital being the second largest user. Mr. Dawson asked if any bulk users had expressed concern over rate increases. Mr. Utt replied that Hardie had expressed interest in restructuring rates to charge less as use rose, but had not really pushed the issue. James Hardie he added was potentially Page 2 of 7/April 9, 2019 looking at doubling their water use in the next year, which might lead the Town to consider rate restructuring. Mr. Goodman said there was some pushback from Hardie over water and sewer rates with the firm looking at ways to reduce their costs. Their executives he continued seemed to understand the Town's charges, but also noted the purity of the Town's water contributing to savings in treatment costs. Council moved on to the proposed increase in monthly garbage service charges. 4c. Proposed Increase in Monthly Garbage Service Charges Mr. Utt said that there was a proposed $2.00 increase in garbage rates. The PSA had been discussing a $2.00 increase, but efforts to contact them to find out the actual increase were unsuccessful. Mr. Utt suggested proceeding with the hearing and if PSA only increased rates by a dollar, the Town could then follow suit. An increase would result in the Town picking up some additional revenue, approximately $3,000-$4,000, maybe as close to $8,000, since the Town received 5% of what was collected. Mayor Clark opened the public hearing at 611 p.m. Receiving no comments, he closed the public hearing at 6:12 p.m. Mr. Utt noted there would be action on these issues at future Council meetings. Council then received a Budget Update from Mr. Utt. 5. Budget Update Mr. Utt said he wanted to review the budget as it presently stood. In response to Mr. Goodman's challenge to "find" up to $50,000 in the budget, Mr. Utt responded that he had some thoughts and ideas on how that could be done. Noting expenditures, Mr. Utt mentioned saving $7,500 in Contributions to the SWVA Cultural Center and correcting personnel costs at the Senior Center of approximately $15,000. Regarding the cost allocation plan, Mr. Utt noted that the plan called for an annual transfer of $360,840 from the Water Fund to the General Fund and approximately $403,000 from the Sewer Fund to the General Fund which the Town had not been able to approach. He proposed that if the Town funded 50% of that transfer amount then the General Fund could be increased by $70,000. Mr. Utt said that there was $100,000 available for a variety of projects. Currently, he said the budget funded the CIP and deposited $25,000 into Contingency, which left $100,000 for reserves or for community development or narcotics officers. There were options available he added and that overall the budget was in a "good place". He cautioned that the Water and Sewer Fund's ability to fund the cost allocation plan was dependent upon adoption of the proposed rates. Page 3 of 7/April 9, 2019 Mr. Goodman asked when the cost allocation plan was last updated. Mr. Utt responded that it was updated last year. Ms. Reece added that the plan was updated using data from two years prior. Mr. Goodman then asked if the Town had in the past done more than 25%-30% (of the full transfer amount). Mr. Utt replied that the Town this current year did $125,000 in water transfers and $187,000 in sewer transfers to the General Fund, at a percentage of one-third the water and forty-three percent of the sewer. Mr. Goodman asked if the Town had met the 50% level before to which Mr. Utt replied not to his knowledge. Mr. Goodman ventured that the Town had held off making transfers under the cost allocation plan, to which Mr. Utt responded the Town had not been able to do them. Mr. Goodman said that traditionally the water and sewer funds had been subsidized by the taxpayer at the rate of approximately $400,000. Mr. Utt said that was one way to look at the matter. He referenced the budget handout and noted the $100,000 was listed under "Total Other Financing" to be returned to reserves pending conversation with Council. Discussion then turned to the cigarette tax. Mr. Dawson said that he understood that the figure for the cigarette tax had been adjusted for a decrease in revenues. Mr. Utt replied that the decrease was $15,000. Mr. Goodman noted that he saw the revenues from the Town's cigarette tax had gone up. Mr. Utt said the Town had sold more stamps in one month. Mrs. Reece explained that sometimes persons bought extra stamps possibly to carry them over into the next year. Each stamp purchase cost $7,500. Mr. Goodman asked how revenue from the cigarette tax was looking. Mr. Utt responded that the revenue would be low and that was why projected revenues were reduced in the budget. Mr. Goodman mentioned discussions on possibly reducing the tax, to which Mr. Dawson replied that was part of discussions on budget expectations on how much revenue would be brought in and was Council expecting too much (regarding revenues). Council next discussed salaries relating to Public Works. Mr. Dawson noted that funds were budgeted for the January implementation of the rest of the salary study, but that discussions had indicated that would not appropriately address the concerns in Public Works. He asked if there were any figures available addressing that issue. Mr. Utt responded that he had worked with some numbers to get an idea, but that he had no "good" data to discuss t;iis evening. Mr. Dawson said he wanted to make sure that the numbers were not included because it was not considered feasible. Mr. Utt responded it was an option that should be examined. He noted that 25 positions would be affected and estimated that an increase of $1.00 per hour in wages would cost $50,000 per year for laborers and operators. Mr. Utt reminded Council that not all the cost would be in General Fund money but would include Street money, some General Fund money, along with water and sewer funds. Mr. Penn suggested that since some of those positions had been vacant for so long that there should be some funds available. Mr. Utt said that something like that could be Page 4 of 7/April 9, 2019 done this current year. He added that he had been hesitant to change the salary study recommendations until all positions were funded under the plan, after which the deficiencies could be addressed. Mr. Goodman ventured that once Phase 3 was done across the board in January, the focus would be on Public Works to determine where the shortages and the salary deficiencies were. Mr. Utt said that was the goal, but cautioned that the Town may not be able to wait that long. Mr. Goodman said he did not see the economy getting worse and, given the low unemployment, the Town had to find a way to make its positions more appealing. Mr. Dawson asked about promoting the Town's benefits as an employer. Mr. Utt said he had considered it. Mr. Dawson then asked how much was in the promotional line item and what was it used for. Mr. Utt replied that he thought there was $10,000 in the line item and it was for ads in magazines, billboards, etc. Mr. Dawson said he was mistaken thinking it was a line item for raises or a pool for merit raises. Mr. Utt said he wanted to prepare a system (for merit raises) for the upcoming budget year for distribution to department heads and staff. He wanted it done in the right way, but he wanted the employees to know there was a merit increase based on their job. It was not planned for this budget but for the next budget (2020-2021). Mr. Goodman said merit raises were harder on the department heads that was realized. Some guide needed to be available to help department heads determine who got the raises. Mr. Utt said he was presently developing those procedures. Mr. Goodman asked if there would be any work in the budget concerning "in -band" adjustments, where an employee was doing more than their position required. Mr. Utt responded that was merit. Mr. Goodman distinguished between a merit (working above), and an in -band adjustment (where an employee has taken a permanent shift in duties). Mr. Utt replied that he dealt with those issues as they came up during the year as long as they could be worked out within the frame of the existing budget. Mr. East asked what was not being done at Public Works due to the labor shortage. Mr. Utt said that new water lines were not being done. He wanted to replace the lines on Jefferson, 7th 8th and 9th streets since these had the oldest galvanized lines. In addition, any maintenance done was reactive and not preventative. Mr. Goodman said the Town had to do preventative maintenance since rate increases were justified to the citizens as a way to increase the Town's capacity for preventative maintenance. However the maintenance was not done because the Town could not recruit enough workers for Public Works. Mr. Utt said the Town was looking at contracting out the Jefferson project since it was not a huge project that required Health Department engineering design. The cost might be $100,000 instead of $85,000. Mr. Goodman said since it was 15% more to contract it out, he preferred to see the 15% go to the employees to do the work in-house. Mr. Utt responded if the Town had the employees to do it. Page 5 of 7/April 9, 2019 Mr. Goodman added that he thought the reason the Town had trouble retaining and recruiting employees is that there was such a disparity between what the Town paid and what some local manufacturers paid. Mr. Penn opined that in the next couple of weeks, Public Works employees would not be able to do anything but mow. Mr. Utt said that the Street Dept. had set up a plan that recruited some high school students for mowing which should adequately cover the summer. However, water and sewer were still concerns. Mr. Utt added that he felt that the problem was not competition with manufacturers, but with contractors, the County, Atmos and others. He ventured that when the pipeline was completed there would be more employees to choose from, but that was still a year away. Mr. East asked if an employee could be hired at a higher level if they had experience. Mr. Utt said he felt something like that could be put into practice, but it would be a matter of how that would leave the other employees who have been here. Mr. East remarked that the Town must recognize experience to get experience. Discussion then turned to ways to recruit employees possibly using electronic services and other means. Mr. Utt mentioned having posted a job on Indeed and got responses from persons for various vocations. Mr. Dawson ventured even if there were a large number of responses, there still could be one or two persons that would be acceptable. Mr. Goodman mentioned that his workplace used ZipRecruiter which was expensive but resulted in qualified applicants from all over the country. Mr. Goodman asked if the Town was doing any on-line based hiring on applications. Chief Roche said the Police Department experimented with an advertisement on Facebook with the ability to reply. A police testing email address was then set up to send forms to candidates. The effort resulted in forty potential candidates, the greatest number in one and a half years. Mr. East said he thought the Chief had the answer. Mr. Goodman felt the Town should look for solutions to purchase the software as a service and see what it would cost to host applicant assistance to apply on-line. Mr. Dawson asked Chief Roche what their Facebook attempt cost to which the Chief replied that it cost nothing. Mr. Dawson suggested the Town should change its approach and get more aggressive about trying to find employees. A short discussion then started concerning what an online application might consist of and what might be involved in getting it operable. Mr. East asked Chief Roche how long it took to implement their Facebook attempt. Chief Roche said it was discussed at a staff meeting and the site was up in a day. Mr. East suggested using the Police Department's template as a starting point. Mr. East also asked if it made sense to outsource some mowing. Mr. Utt said he had asked Mrs. Caudill to get prices for the parks and cemeteries. Mr. Radcliffe suggested Page 6 of 7/April 9, 2019 that things could come to the point where money could be put to the side for overtime to monitor mowing by inmate labor. Mr. East cautioned that the Town should not put long term value added projects aside for mowing. 6. Future Meetings With budget discussions concluded, Mr. Utt proposed to schedule a public hearing on the budget and asked Council would it be appropriate to add a conversation point to next week's (April 16th) meeting to discuss a final decision on utility rates. He suggested the final budget public hearing would be on April 30th with a vote on the budget in May. Council agreed. Mr. Goodman asked to participate electronically in the budget proceedings. The Clerk noted that a video policy had to be approved and that had not been finalized. Mr. Utt said the video policy would be on the agenda for the work session. A short discussion ensued on decal sales. Mr. Radcliffe asked Mrs. Reece if the collections were on target. Mrs. Reece replied that at the end of the month, collections were a little low as compared to last year, but that they were still coming in. The Police Department was doing an inventory that would pick up additional vehicles. Chief Roche reviewed the efforts by the Department to inventory vehicles in the Town that did not have current decals. Following the inventory, summonses would be issued starting in May. Mayor Clark noted that Council would have its meeting on the Community Development Department on Saturday, April 13th at 8:00 a.m. at the Senior Center, followed by a work session on April 16 at 5:00 p.m. in Council Chambers. 7. Adiournment There being no further discussion, Mr. Goodman moved to adjourn. The motion was seconded by Mr. Dawson and approved by unanimous voice vote at 6:48 p.m. Approve . avid L. Clark Mayor ATTEST: David N. Quesenber Clerk of Council Page 7 of 7/April 9, 2019