Minutes 3/24/2009 6:00:00 PM

PUBLIC COMMENT

Ebony Thorpe, JONAH Transportation Task Force, urged the Commission to consider the transportation needs in the community.

Ken Benninghaus, 178 Academy, spoke in favor of Hamilton Park renovations and agreed with holding the Cereal Festival in June for our citizens.

George Gray, 111 Academy, asked the City to consider renovating Hamilton Park.

Dan Meza asked citizens in attendance who were in support of Hamilton Park renovations to stand up and asked the Commission to fund the renovations.

2009-2010 BUDGET DISCUSSION

Ken Tsuchiyama noted the purpose of the workshop was to share information regarding the city's financial condition and gain feedback from the Commission. Although Battle Creek is looking at some challenging financial times for the next few years, it appears to be in better position than other areas in Michigan. He noted the positive development in Battle Creek: a downtown transformation effort, the possibility of Battle Creek becoming a health and food protection center, the United Solar Ovonics project, and community partnerships.

Mr. Tsuchiyama stated Battle Creek has a history of having a healthy fund balance and it plays a major role in obtaining funds when needed. There has been responsible management of fund balance because of the creation of a revenue-based budget system. The Finance Department takes a long-term view when budgeting and has already taken steps to realign the budget. These practices have resulted in high bond ratings.

Jim Ritsema, Finance Director, provided a historical perspective of Battle Creek's budget. A great concern for this year is a reduction in income tax revenue (8% reduction). Corporate and withholding trends show more reductions in income tax and major revenues for 2010. Expenditures have leveled and it is anticipated that costs can be maintained. There will be no use of fund balance for next year. There is a slight increase in Police and Fire millage and property tax. Mr. Ritsema indicated there will be a $2.2 million reduction in the General Fund for 2009/2010 and another $3.4 million shortfall over the next 4 years. Major and Local Street Funds show a major deficit with a 5% reduction in state revenues.

Comm. Yankama asked if stimulus dollars could be used to aid the street fund.

Mr. Ritsema said they are obligated to use stimulus funds for capital improvements.

Comm. Yankama asked how the City deals with the fluctuation of the Police and Fire retirement fund.

Mr. Ritsema stated the investment losses or earnings are spread over a five-year period which smooths the ups and downs over time.

Mr. Ritsema indicated that the city adopts a utility rate model to determine cash flow. They are projecting to be down to the $5M level and they are not keeping pace with the expenses in the fund.

Mayor Behnke asked if there has been some conservation of water by businesses.

Mr. Ritsema stated that is possible as they are being pressed to keep their costs under control, too.

Ken Tsuchiyama added that businesses are being asked to reduce their costs to remain competitive in the market. He stated it is very important to monitor the funds for Water and Wastewater in case there is an emergency.

FIVE MINUTE RECESS

The City Manager shared the organization's challenges: He anticipated budget reductions; over $8M in cuts have already been initiated since 2000. The workforce has been reduced by 5% (13 management and 20 non-management positions). Mr. Tsuchiyama noted the reduction in the number of full-time employees, currently 584, down from 630. He anticipated permanent reductions versus one-time cuts, staffing reductions, and some service reductions. He reported if the City does not reduce staffing levels, the City will not be able to continue the same budget levels. Mr. Tsuchiyama anticipated looking at vacant positions first and provide possible retirement incentives to those close to retirement, and other personnel-related cost reductions to minimize layoffs. Special contracts, like Leila Arboretum Society and Neighborhoods, Inc., will be analyzed just as special funding for departments to determine what benefits/services are received.

Mr. Tsuchiyama anticipated a budget recommendation by May 1, 2009. Details on possible job cuts probably won't be announced before the May workshop. A second workshop will be scheduled for May 7th. A resolution will set a Public Hearing for May 19th. By June 16, the City Commission will hold a Public Hearing and present a budget resolution for City Commission approval.

The City Manager added that stimulus dollars will not be used to balance the budget.

Comm. Baldwin asked if the maintenance of a capital cost will be considered when using the stimulus funds for special projects.

Mr. Tsuchiyama answered absolutely.

Vice Mayor Walker remarked there is an opportunity for creating jobs; but the philosophy would not fund positions that could not be supported at grant's end. Is there a number of jobs that could be created?

Mr. Tsuchiyama answered the stimulus projects listed showed a certain number of job creations. As soon as stimulus information becomes available, commissioners will be advised.

Mr. Ritsema shared his concern with SEV becoming close to taxable value. He noted that in 2013, there will be a loss of the BCTIFA land contract revenue. There remains pension fund issues as it relates to police and fire.

Mr. Tsuchiyama concluded that the 2010 budget will be more challenging, but it's best to start planning ahead with this budget in considering staffing and services. He envisioned a citizens' input process before 2010 to see what are essential city services.

Comm. Hersha requested the Finance Department share as much information as early as possible.

Comm. Simmons commented about Special Contracts and did not feel they should be on the same level as city departments.

Comm. Yankama appreciated staff's openness.

Vice Mayor Walker felt the bond ratings speaks to the caliber of the city's finance management. He appreciated that Battle Creek is in a better position than other organizations.

Mr. Ritsema noted that budget binders will be available in mid April.

ADJOURNMENT

Mayor Behnke adjourned the budget workshop at 7:36 P.M.

	Meeting Type:	Workshop
	Meeting Date:	Tue March 24, 2009 06:00 PM
	Location:	DPW Multipurpose Room
	Chair:	Mark Behnke - Mayor
	Prepared By:	Deidre A Laser - City Clerk

Attendance Committee Members:	Attendance Staff:
Susan Baldwin City Commissioner Ryan Hersha City Commissioner Chris Simmons City Commissioner Mark Behnke Mayor Sherry Sofia City Commissioner Diane Thompson City Commissioner Tony Walker Vice Mayor Andrew Yankama City Commissioner	Bedsole, Susan - Director of Licensing & Compliance Claggett, Russell - Employee Relations Director Dopp, Chris - City Engineer Gillette, Marcie - Neighborhood Services Manager Hampton, Jackie - Deputy Chief of Police Hausman, Larry - Fire Chief Hensley, Rick - Risk Manager Hovarter, Jeff - Parks & Recreation Director Hutchison, Jerry - Transit Manager Kohs, Ken - Environmental Services Director Laser, Deidre - City Clerk Reen, Michelle - Assistant to the City Manager Ritsema, James - Assistant City Manager/Finance Director Ryan, Dan - Chief Information Officer Tsuchiyama, Ken - City Manager Wicklund, Eileen - City Attorney Zanotti, Greg - Transportation Director
Absent:
John Godfrey City Commissioner