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February 22, 2016 Agenda KF,M CW ATHRYN IGLEYAYOR ITY OF OODBURN TAL,CW1 ERESA LONSO EONOUNCILOR ARD LE,CWII ISA LLSWORTHOUNCILOR ARD CCA RC,CWIII ITYOUNCILGENDA OBERTARNEYOUNCILOR ARD S S,CWIV HARON CHAUBOUNCILOR ARD FL,CWV RANK ONERGANOUNCILOR ARD F22,2016–7:00.. EBRUARYPM E M,CWVI RIC ORRISOUNCILOR ARD CHCC–270MS ITY ALL OUNCIL HAMBERS ONTGOMERY TREET 1.CALL TO ORDER AND FLAG SALUTE 2.ROLL CALL 3.ANNOUNCEMENTS AND APPOINTMENTS Announcements: None. Appointments: A.Woodburn Recreation and Park Board Hunter ConlonStudent -Position II1 B.Woodburn Mural Committee2 Sharon Schaub Merri Berlin Colleen Vancil Frank Lonergan Christine Lopez 4.COMMUNITY/GOVERNMENT ORGANIZATIONS None. 5.PROCLAMATIONS/PRESENTATIONS Proclamations: None. Presentations: A.Proposed Targeted Industries Analysis 6.COMMUNICATIONS . None This facility is ADA accessible. If you need special accommodation, please contact the City Recorder at 503-980- 6318at least 24 hours prior to this meeting. **Habrá intérpretes disponibles para aquéllas personas que no hablan Inglés, previo acuerdo. Comuníquese al (503) 980-2485.** February 22, 2016Council Agenda Page i – This allows the public to introduce items for Council 7.BUSINESS FROM THE PUBLIC consideration not already scheduled on the agenda. –Items listed on the consent agenda are considered routine 8.CONSENT AGENDA and may be adopted by one motion. Any item may be removed for discussion at the request of a Council member. A.Woodburn City Council minutes of February 8, 20163 Recommended Action: Approve the minutes. B.Crime Statistics through January 20166 Recommended Action: Receive the report. C.2016 OLCC Renewal10 Recommended Action:The Woodburn City Council recommends to the OLCC to renew and to deny the liquor licenses for the listed businesses for the year of 2016. D.New Outlet-Wholesale Malt Beverage Wine Privilege for 7 Bev Global12 Recommended Action:The Woodburn City Council recommends that the OLCC approve a New Outlet-Wholesale Malt Beverage Wine Privilege. 9.TABLED BUSINESS None. 10.PUBLIC HEARINGS None. –Members of the public wishing tocomment on items of general 11.GENERAL BUSINESS business must complete and submit a speaker’s card to the City Recorder prior to commencing this portion of the Council’s agenda. Comment time may be limited by Mayoral prerogative. A.Council Bill No.2997-AResolution Amending Resolution 2067 (The 14 Global Inclusion Advisory Committee Resolution) to Specify that Two City Councilors will Serve as Members Recommended Action:It is recommended that the City Council approve the attached resolution amending resolution 2067 (The Global Inclusion Advisory Committee Resolution) to specify that two City Councilors will serve as members. B.FY 2016-17 Financial Plan18 Recommended Action:Adopt the attached FY 2016-17 Financial Plan February 22, 2016Council Agenda Page ii (Budget Policies & Fiscal Strategy and Five-Year Financial Forecast) via a motion. C.Transient Occupancy Grant Distribution and Proposed Three-Year49 Agreement with the Woodburn Area Chamber of Commerce Recommended Action:Authorize the renewal of a proposed three- year agreement, effective July 1, 2016 through June 30, 2019 (see Exhibit A) with the Woodburn Area Chamber of Commerce. The proposed agreement provides $50,000 per year and requires program deliverables, timelines and reporting. D.Award of Construction Contract for the N. 1st Street Sanitary Sewer 58 Rehabilitation project, BID #2016-03 Recommended Action:That the City Council, acting in its capacity as the Local Contract Review Board, award the construction contract for the N. 1st Street Sanitary Sewer Rehabilitation project to CG Contractors, LLC in the amount of $139,239.00. E.City Administrator Pro Tem60 Recommended Action:It is recommended the City Council appoint Assistant City Administrator Jim Row as Administrator Pro Tem for the periodMarch 16 through March 26, 2016. – These are 12.PLANNING COMMISSION OR ADMINISTRATIVE LAND USE ACTIONS Planning Commission or Administrative Land Use actions that may be called up by the City Council. None. 13.CITY ADMINISTRATOR’S REPORT 14.MAYOR AND COUNCIL REPORTS 15.ADJOURNMENT February 22, 2016Council Agenda Page iii Agenda Item February 17, 2016 TO:City Council FROM:Kathy Figley, Mayor SUBJECT: Committee Appointment he following appointmentaremade, subject to the approval of the Council. T Please forward any adverse comments to me prior to the Council meeting on Monday, February22, 2016. Noreply is required if you approve of my decision. Woodburn Recreation and Park Board Hunter Conlon Student - Position II 1 Agenda Item February 17, 2016 TO:City Council FROM:Kathy Figley, Mayor SUBJECT: Committee Appointments he following reappointments aremade, subject to the approval of the Council. T Please forward any adverse comments to me prior to the Council meeting on Monday, February 22, 2016. Noreply is required if you approve of my decision. Mural Committee Sharon Schaub Merri Berlin Colleen Vancil Frank Lonergan Christine Lopez 2 COUNCIL MEETING MINUTES FEBRUARY 8, 2016 DATE COUNCIL CHAMBERS, CITY HALL, CITY OF WOODBURN, COUNTY OF MARION, STATE OF OREGON, FEBRUARY 8, 2016 CONVENED The meeting convened at 7:03 p.m. with Mayor Figley presiding. ROLL CALL Mayor Figley Present Councilor Carney Present Councilor Lonergan Present Councilor Schaub Present Councilor Morris Present Councilor Ellsworth Present Councilor Alonso Leon Present Staff Present: City Administrator Derickson, City Attorney Shields, Assistant City Administrator Row, Police Chief Ferraris, Public Works Director Scott, Economic and Development ServicesDirector Hendryx, Human Resources Director Hereford, Economic Development Director Johnk, Recreation Services Manager Wierenga, Community Relations Manager Gutierrez-Gomez, Communications Coordinator Horton, City Recorder Pierson ANNOUNCEMENTS AND APPOINTMENTS 0:00 A.City Hall and the Library will be closed on February 15 in observance of President’s Day. The Aquatic Center will be open regular business hours that day. B.Global Inclusion Advisory Committee Elias Villegas Luis Molina Elida Sifuentez Rafael Vasquez-Lopez Maria Gutierrez Don Judson Kasi Pankey Antonio Anfilofieff Schaub/Alonso Leon ... approve the appointments. The motion passed unanimously. Schaub/Lonergan …approve the appointments of Councilor Alonso Leon and Councilor Carney to the Global Inclusion Advisory Committee. The motion passed unanimously. C.Woodburn Recreation and Park Board Eric Swenson - Position IV Lonergan/Alonso Leon ... approve the appointment. The motion passed unanimously. 3 COUNCIL MEETING MINUTES FEBRUARY 8, 2016 COMMUNITY/GOVERNMENT ORGANIZATIONS 0:04 Woodburn School District – Chuck Ransom, Woodburn School District Superintendent, announced that the City of Woodburn’s graduation rate from 2014 is 84.5% and when you include the 5 year students it goes up to 91%. Mr. Ransom provided an update on the Bond projects that are underway as well as information on future projects. Councilor Carney suggested the school district work with City traffic engineers and public works to deal with any problems that might arise regarding increased traffic and the possibility of improved safety for the students. Councilor Morris added that he would like to see lights added to the path that runs th between 5 street and the high school. Councilor Carney recommended that due to the level of interest that has been generated by the alternative school more information needs to get out to the public. Mr. Ransom answered that he would be available to come to homeowners association meetings to talk about this issue. Councilor Carney stated that he will confer with the Tukwila Homeowners Association about inviting Mr. Ransom as a speaker. PROCLAMATIONS/PRESENTATIONS 0:35 Economic Development Plan/Tourism Overview – Economic Development Director Johnk and Hollie Thomas, Executive Director of the Chamber, provided a presentation on the Woodburn Economic Development Plan and the Woodburn Tourism Development Plan. Councilor Ellsworth encouraged them to think of the people that live here and keeping them here to spend their money. Councilor Alonso Leon stated that she is excited about this partnership and asked that marketing materials be bilingual. BUSINESS FROM THE PUBLIC 1:25 Nancy Kirksey, 1049 McKinley St., announced that the Mayor’s Prayer Breakfast will take place onFebruary 23from 7:30 a.m. to 9:00 a.m. at the Methodist Church and tickets can be purchased through her, the Chamber, Longs or at www.woodburnkiwanis.org. She added that Scott Russell will be the speaker. CONSENT AGENDA 1:27 A. Woodburn City Council minutes of January 25, 2016, B. Woodburn Recreation and Park Board minutes of January 12, 2016, C. Municipal Judge Employment Agreement. Lonergan/Morris ... adopt the Consent Agenda. The motion passed unanimously. COUNCIL BILL NO. 2996 - A RESOLUTION INITIATING CONSIDERATION OF 1:28 LEGISLATIVE AMENDMENTS TO THE WOODBURN DEVELOPMENT ORDINANCE Lonergan introduced Council Bill No. 2996. Recorder Pierson read the bill by title only since there were no objections from the Council. Councilor Lonergan stated that he has a concern about the language in item 15 under revisions and that he would like all changes to go through Planning Commission or City Council. Economic and Development Services Director Hendryx stated that any changes would go before the Planning Commission and this is just in casethey find something that was missed. On roll call vote for final passage, the bill passed unanimously. Mayor Figley declared Council Bill No. 2996 duly passed. 4 COUNCIL MEETING MINUTES FEBRUARY 8, 2016 ACCEPTANCE OF TWO PUBLIC UTILITY EASEMENTS FOR TAX LOTS 1:39 0051W17BC00100 & 0051W17BC00200 Lonergan/Schaub ...accept the two Public Utility Easements described on Attachment “A” and Attachment “B.” The motion passed unanimously. CITY ADMINISTRATOR’S REPORT 1:41 The City Administrator stated that all of us have had heavy hearts today for the officer that was killed in Seaside and we are all thinking of that community. MAYOR AND COUNCIL REPORT Councilor Ellsworth invited the public to attend the Relay for Life Kickoff which will be a brunch February 20 at the Woodburn Health Center. Councilor Carney complimented Mr. Ransom on being so willing to deal with the nature of the community’s concerns. ADJOURNMENT 1:43 Lonergan/Alonso Leon ... meeting be adjourned. The motion passed unanimously. The meeting adjourned at 8:46 p.m. APPROVED ___________________________ KATHRYN FIGLEY, MAYOR ATTEST_________________________ Heather Pierson, City Recorder City of Woodburn, Oregon 5 6 7 8 9 Agenda Item February 22, 2016 TO:Honorable Mayor and City Council through City Administrator THRU: James C. Ferraris,Chief of Police FROM:Jason R. Alexander, Captain SUBJECT: 2016 OLCC Renewal RECOMMENDATION: The Woodburn City Council recommends tothe OLCC to renew and to denythe liquor licenses for the listed business for the year of 2016. BACKGROUND: Annually the police department reviews activities occurring at or in the vicinity of all licensed liquor establishments in Woodburn. Through the established guidelines and procedures, the City Council ensures equitable and consistent treatment of liquor license applications. The following liquor license applications were reviewed in accordance with police department standards and are recommended for approval: Off Premise Sales: 7-ElevenA&J Market BI-Mart CorpC and M Market Crossroads Grocery & DeliDel Sol Market EZ Stop Grocery & DeliWoodburn Stop N Go Sunrise Food Mart and DeliYoung Street Market La AztecaNew Am/PM Pipers JewelryTienda Mexicana El Compa Safeway Store #1976Carniceria El Ranchito Tienda GuatemalaWalgreens Wal Mart SupercenterWoodburn Market Woodburn Fast Serve INCDel Sol Market Woodburn Mega FoodsSenior Estates Golf Course Valley Pacific FloristFin De Semana Meat Market Mariscos El SarandeadoTienda Mexicana Alban Guacamole’s MarketPendleton Outlet Agenda Item Review:City Administrator ___x___City Attorney ___x___Finance ___x__ 10 Honorable Mayor and City Council February 22, 2016 Page 2 Full On Premise Sales: Chu’s EateryThe Raven Inn El Agave GrillDenny’s At Woodburn Eagles LodgeElks Lodge Elmer’ RestaurantEl Agave Grill Los Cabos Mexican RestaurantLupita’s Mariscos El SarandeadoOGA Members Course Rumor’s Bar and GrillTrapalaRestaurant The End ZoneYun Wah Casa Marques Mexican GrillEl Tule Taqueria Legaria’s Bar and Grill7 Mares Restaurant Trapala Brewpub & RotisseriaRed Robin Limited On-Premise Sale: Abby’s Pizza Inn of WoodburnTaqueria Las Palmas DEDE’s Deli Sora Sushi Restaurant Los Laureles TaqueriaCottage Kitchen Senior Estates Pizza Hut Woodburn Lanes Shari’s of Woodburn Los Laureles Taqueria Caniceria Y Restaurant La PerlaFresca’s Mexican Grill Tienda Mexicana El Compa : DISCUSSION The Woodburn Police Department recommends the denial of the Monte Carlos Sports Bar and Sip Wine and Bistro licenses, as both establishments are no longer in business. The Woodburn Police Department has completed a background investigation, in connection with the OLCC,on the remaining businessesand found nothing that would disqualify or preclude the renewal of the remaininglicenses. FINANCIAL IMPACT: None. 11 Agenda Item February 22, 2016 TO:Honorable Mayor and City Council through City Administrator THRU: James C.Ferraris, Chief of Police FROM:Jason R. Alexander, Captain UBJECT: S New Outlet-Wholesale Malt Beverage Wine Privilege RECOMMENDATION: TheWoodburn City Council recommendsthat the OLCC approve aNew Outlet- Wholesale Malt Beverage Wine Privilege. BACKGROUND: Applicant: Jose Gonzalez 3178 Livingston St. Ne. Salem, OR 97301 503.851.6582 Business:7 Bev Global 445 N First St. Woodburn OR, 97071 503.358.7680 Owners: Joonees Chay 25245 SW Petes Mountain Rd. West Linn OR, 97068 503.756.9660 Annette Chay 25245 SW Petes Mountain Rd. West LinnOR, 97068 503.358.7680 Agenda Item Review:City Administrator ___x___City Attorney __x____Finance ___x__ 12 Honorable Mayor and City Council February 22, 2016 Page 2 License Type: ,which permits New Outlet-Wholesale Malt Beverage Wine Privilege wholesale beer, wine, and cider to other OLCC licensed establishments. On approximately January 22, 2016,the Woodburn Police Department received anapplication, requesting approval for a New Outlet-Wholesale Malt Beverage for7 Bev Global.This business will be a wholesale distributing station Wine Privilege to import and export for other OLCC licensed establishments, such as restaurants and bars. 7 Bev Global will belocated at 445 N First St. Woodburn OR, 97071. The storewill be openMonday thru Friday 8:00am to 5:00pm.No alcohol will be consumed on the property, nor will there be single individual sales. There willbe no recorded music, DJ music, karaoke, or video lotterygames.The Police Department has received no communication from the public or surrounding businesses in support of or against the new outlet. : DISCUSSION The Police Department has completed a background investigation, in connection with the OLCC,on the applicants and found nothing of a questionable nature, which would preclude the issuance of this license. FINANCIAL IMPACT: None. 13 Agenda Item February22, 2016 TO:Honorable Mayor and City Council through City Administrator FROM:Jim Row, Assistant City Administrator S UBJECT: Global Inclusion Advisory Committee RECOMMENDATION: It is recommended that the City Council approve theattached resolution amending resolution 2067 (The Global Inclusion Advisory Committee Resolution) to specify that two City Councilors will serve as members. BACKGROUND: During the March 7, 2015 Goal Setting Session, oneof the priority goals established by the City Council was the creation of a Global Inclusion Advisory Committee (GIAC). The Council formally adopted this goal during the April 13, 2015 regular City Council meeting. The City Council adopted a resolution creating the GIAC at the September 28, 2015 City Council meetingand appointed community members and Council representatives to the Committee on February 8, 2015. DISCUSSION: Theoriginal resolution established that only one position on the Committee was reserved for a City Councilor. At the February 8, 2015meeting, the City Council appointed two City Councilors to the Committee. The attached resolution has been revised to provide for two City Councilors to serve on the Committee. The revised membership structure is as follows: Between one (1) and sixteen (16) community members Woodburn’s Mayor, or the Mayor’s designee Two (2) City Councilors Agenda Item Review:City Administrator ___x___City Attorney __x____Finance ___x__ 14 Honorable Mayor and City Council February22, 2016 Page 2 The Woodburn City Administrator, or the City Administrator’s designee Woodburn’s Chief of Police The Assistant City Administrator The Director of Economic Development Woodburn’s Community Relations Officer FINANCIAL IMPACT: The FY 2015/16 Budget allocates $5,000 for a GIAC project. 15 COUNCIL BILL NO. 2997 RESOLUTION NO. 2073 ARESOLUTION AMENDING RESOLUTION 2067(THE GLOBAL INCLUSION ADVISORY COMMITTEE RESOLUTION) TO SPECIFY THAT TWO CITY COUNCILORSWILL SERVE AS MEMBERS on September 30, 2015the City Council adopted Resolution 2067 WHEREAS, establishing the Global Inclusion Advisory Committee(GIAC); and the establishment of the GIACwas specifically identified by the WHEREAS, City Council as a 2015-16Priority Goal; and Resolution 2067 currently provides the placement of one City WHEREAS, Councilor on the GIAC; and the City Council believes that the function and effectiveness of WHEREAS, the GIACwill be enhanced by increasing the number of City Councilors on the GIACfrom one City Councilor to two; and in order to implement the City Council'spolicy decision to WHEREAS, increase City Council participation in the GIAC,Resolution 2067 must be amended; NOW, THEREFORE, THE CITY OF WOODBURN RESOLVES AS FOLLOWS: Section 6 of Resolution 2067 is amended to read as follows: Section 1. The GIAC will consist of: Section 6. Membership. A.Between one (1) and sixteen (16) community members, including the following; B.Woodburn’s Mayor, or the Mayor's designee; C.Two (2) City Councilors; D.The Woodburn City Administrator, or the City Administrator's designee; E.Woodburn’s Chief of Police; Page 1 –Council Bill No. 2997 Resolution No. 2073 16 F.The Assistant City Administrator; G.The Director of Economic Development; and H.Woodburn’s Community Relations Officer. Approved as to form: City AttorneyDate Approved: Kathryn Figley, Mayor Passed by the Council Submitted to the Mayor Approved by the Mayor Filed in the Office of the Recorder ATTEST: Heather Pierson, City Recorder Page 1 –Council Bill No. 2997 Resolution No. 2073 17 Agenda Item February 22, 2016 TO:Honorable Mayor and City Council FROM:Scott C. Derickson, City Administrator SUBJECT: FY 2016-17 Financial Plan : RECOMMENDATION Adopt the attached FY 2016-17 Financial Plan (Budget Policies & Fiscal Strategy and Five-Year Financial Forecast) via a motion. : BACKGROUND Woodburn has faceda series of difficult financial challengesin past years. General Fund revenues remain flat while annual operating costs continue to increase, making the City’s ability to maintain existing levels of services more difficult. As a result, the City Council directed that a comprehensive set of financial planning documents be developed and implemented for the purposes of improving the City’s financial sustainability. After havingfirstbeen implemented in 2011, the City has been working with the Financial Plan and Five-Year Financial Forecast as a means of managing the City’s current year budget and the FY 2016- 17 budget development process. In past years, the City Council has been commended by the City Auditor and recognized by the Government Finance Officers Association for the use of comprehensive budget policies and the quality presentation, clarity and transparency of Woodburn’s Budget documents. Overall, the financial plan is intended to help the City better predict cost and revenue trends from year to year, make better budget decisions via the memorializing of sound financial practices, budget administration and if necessary, reducing the City’s budget so that it is consistent with the overall goals of the City Council,the needs of the communityand available resources. Agenda Item Review:City Administrator ___x___City Attorney __x____Finance __x___ 18 Honorable Mayor and City Council February 22, 2016 Page 2 : PROPOSED 2016-17 POLICY Attached is the proposed FY 2016-17 Budget Policies & Fiscal Strategy, which is largely unchanged fromthe previous year. The two primary changes to the proposed Budget Polices includes the establishment ofa FY 2016-17 General Fund PERS Reserve line item in the amount of $250,000 and an increase in the General Fund’s Contingency Reserve from 10% to 17% of the General Fund’s overall operating expenditures in the upcoming budget year. The City is expecting aGeneral Fund PERS rate increase of approximately 20% in FY 2017-18 with additional increases in following years. Based on forecasted FY 2017-18payroll expenses, this translates in about $183,000 in General Fund liability and about $270,000 across all funds. The increase of contingency reserve is consistent with the Government Finance Officers’ Association best practices model and is aresult of the impacts experienced during the last recession.The 2008 economic downturn taught us that recessions set onmore quickly and last longer than in previous decades.I might point out that the City’s prior year practices, and prudent use of General Fund resources, placed the City in a good position to achieve these contingency set asides. Councilors will note the Five-Year Financial Forecast has been updated and is current with its projections. I would encourage Councilors to review the forecast and ask any questions you might have.Councilors should also note that I have forwarded the proposed Budget Policies & Fiscal Strategy, including the current financial forecast, to the citizen budget committee for their review as well. : FINANCIAL IMPACT Although there is no immediate monetary impact on the City, the draft Financial Plan will help make stronger financial decisions that are in the best interests of the community and the City organization. 19 City of Woodburn FY 2016-17 FinancialPlan Budget Policies, Fiscal Strategy &Five Year Forecast SECTION 1.ANNUAL REVIEW& POLICY Fiscal Responsibility A.. It will be the policy of the City of Woodburn to return the highest level (or sustain the current levels) of service with the least amount of taxpayer investment; and to plan accordingly. Balanced Budget B..The City’s Budget shall be balanced. For each fund, ongoing costs are not to exceed ongoing revenues plus available fund balances used in accordance with reserve policies. Budget Process C.. The annual budget process is intended to weigh all competing requests for City resources within expected fiscal constraints. Levels of service will increase or decrease based on the availability of recourses. Requests for new programs made outside the annual budget process are discouraged. New initiatives will be financed by reallocating existing City resources to the services with the highest priorities. Fiscal Recommendations D.. Consistent with the administrative responsibilities outlined in the Charter, the City Administrator will make fiscal recommendations to the City Council on all measures necessary to sustain current levels of service and avoid reductions in City programs, including the consideration by the City Council of new revenue sources if this is determined to be in the best interest of the community. Budget Policies Updated Annually E..The City Council will review and adopt Fiscal Year Budget Policies on an annual basis. Yearly Five-Year Forecast F..The City Council will review and approve the Five-Year Forecast on an annual basis. The forecast is an estimate of future revenues and expenses and is intended to serve asan estimate and a guideline for making sound financial decisions in the current fiscal year and budget preparation. The Five-Year Forecast and the annual Budget Policies together will constitute the City’s Annual Financial Plan. Policy Direction G.. Consistent with their policy making role outlined in the Woodburn City Charter, the City Council is responsible for providing policy direction to determine the City’s overall fiscal policy. In response to the fiscal recommendations made by the City Administrator, the City Council shall consider all measures necessary to sustain current levels of service. In addition, the City will avoid reductions in City programs and consideration of new revenue sources if this is determined to be in the best interest of the community. 1 20 Budget H..Under the Woodburn City Charter, the City Administrator serves as Woodburn’s Budget Officer. The Finance Director assists the City Administrator with preparation and presentation of the annual budget, budget administration and the day-to-day finance operations. The Budget Officer is responsible for the administration of the annual budget and may approve or disapprove the expenditures contained in the adopted budget if deemed in the best financial interest of the City. Budget Administration I. . As authorized by the City Charter, the City Administrator is responsible for taking actions necessary to keep expenditures within anticipated revenues, including initiating layoffs, reorganizations, downsizing, program reductions and adjustments to service levels.The City Administrator will keep the City Council informed as to any steps taken to reduce expenditures and, whenever possible, the Council will review the decisions and consider options during a mid-year budget review. SECTION 2. DISCRETIONARY & DEDICATED RESOURCES Recognizing Financial Limits A.. Woodburn will make a distinction between two different types of services; 1) those that are funded primarily from City discretionary resources, and; 2) those that are funded primarily from dedicated resources. Discretionary Resources B.. The General Fund is the fund that collects discretionary resources to provide discretionary programs and services as recommended by the Budget Officer and approved as part of the City’s cycle. The City will continue to fund these programs primarily from General Fund discretionary resources. These include police, park and recreation, economic development, land use financial services and other programs. Dedicated Resources C.. Dedicated services (e.g., fees, grants, utility revenues, etc.) are traditional City services that are provided primarily with dedicated funds. Dedicated resourcesare subject to restrictions via state and federal law, grant agreements and contracts, City policy and ordinances. Frequently, these resourceswill be state or federal programs that the City administers locally, such as public safety programs or transportation grants. The City will fund these programs (i.e. speed and safety belt enforcement, etc.) primarily from dedicated resources. SECTION 3. GENERAL FUNDBUDGET(DISCRETIONARY) Annual Budget Goal A. .The goal shall be to prepare a budget that maintains existing high priority programs supported by the General Fund while at the same time seeking savings wherever possible. Funding for lower priority programs will be reduced or eliminated to ensure that expenditures remain in balance with resources. General Fund Emphasis B.. The highest priority shall be to conserve General Fund discretionary resources to fund high priority programs as defined by the City Council and City Administrator. Maximize City Council’s Discretion C..Wherever legally possible, revenues are to be treated as discretionary resources, rather than as dedicated to a particular program or service. The goal is to give the City Council as much flexibility as possible in allocating resources to local priorities. New Revenues D.. In order to sustain current levels of service, avoid reductions in public safety programs or increase services needed to meet community demands, the City Council may consider new discretionary revenues if it is determined to be in the best interest of the community. 2 21 Use of Dedicated Funding Sources E.. Whenever legally possible, funding responsibility for existing programs or activities should be transferred to appropriate dedicated funding sources, freeing up scarce discretionary resources to fund City Council priorities. Cost Efficiency F..Staff will prepare fiscally conservative budgets and will seek savings wherever a balance between cost efficiency and the quality of public service can be achieved. Materials & Services G..Departments are to prepare “base budgets” with a goal of holding General Fund or other discretionary resources for materials and services expenditures to no more than prior yearbudget levels. No General Fund Street Maintenance Support H.. No discretionary General Fund revenues will be used to support street maintenance activities.General Fund street lighting transfers are exempted from this policy. The current transfer from the General Fund for street lighting will be maintained as long as it is fiscally viable. The transfer will be reviewed as approved each fiscal year as part of the budget process. Revenue Estimates I.. Departments should budget for revenues based on the best information available during the budget process. If additional information becomes available during the budget process, it should be provided to the Finance Director’s Office. Accuracy in revenue/expenditure estimates iscritical. New revenueestimates should be based on the best information available. Subsequent annual estimates should also take into consideration the actual receipts from the previous year. Pursuit of New Departmental Revenues J..Departments shall pursue revenue sources to the fullest extent possible for all services as well as totalcost identification (including indirect costs) for fee setting purposes, grants or other funding opportunities. Any new revenue sources should be used to offset the cost of existing staff and programs, rather than funding new staff or programs. Fee schedules will be reviewed annually to ensure costs are recovered.Fee schedules will be updated as part of the annual budget process. Expenditure Reductions K..Reductions in revenues may require expenditure reductions from the “base budget” level. If reductions are required, the City Administrator will be guided by the City Council’s adopted Resource Reduction Strategy (See Section 17). Discretionary Programs L.. New discretionary programs may be included in the Proposed Budget with the prior approval by the City Administrator and if the new program is deemed a high priority activity. The impact of new or expanded programs on overhead services (information system services, financial services, building / grounds maintenance, human resource services, budget services, etc.) shall be evaluated to determine if overhead services need to be increased due to the addition of new programs. The costs of increases in overhead services attributed to additional programs shall be included in the analysis of the total cost of new programs.Should outside funding for a program expire, the program may be terminated by the City Administrator or the City Council. Full Cost Recovery M..City staff shall make every effort to assign costs where they occur through the use of interdepartmental/interfund charges and indirect cost percentage assignments. The intent is to clearly define the actual cost of each direct service the Cityprovides internally or externally. The first priority is the recovery of overhead costs from all funds and grant programs. 3 22 Annual Budget Savings N.. To the extent General Fund supported departments experience savings during the year (due to position vacancies, etc.) that money should not be spent. Instead it should be saved to augment the beginning fund balance for the next fiscal yearexcept as approved by the City Administrator. SECTION 4. NON-GENERAL FUND / UTILITY BUDGETS(DEDICATED) Bottom-Line Emphasis A. .For activities or programs funded primarily from non-General Fund sources, Departments are to prepare “base budgets” with a goal of holding any General Fund contribution to no more than the amount provided in the current fiscal year, subjectto the availability of funds. Whenever possible, reductions in General Fund contributions should be achieved. No Backfilling B.. General Fund discretionary dollars will not be used to backfill any loss in water and/or sewer City utility revenue, state-shared or federal revenues, grants or dedicated funding programs (for further information, see the Resource Reduction Strategy). Revenue Estimates C.. Departments should budget for revenues based on the best information available at the time the budgets are prepared. If additional information becomes available during the budget process, it shall be provided to the Finance Department. New revenues should be estimated based on available information the first year. Subsequent annual estimates should also take into consideration actual receipts from the previous year. Overhead Cost Allocation Charges D..All non-General Fund departments should budget the amount allocated to that department. Cost Efficiency E..As with the General Fund, staff responsible for non-General Fund budgets will prepare fiscally conservative budgets and will seek savings wherever a balance between cost efficiency and the quality of public service can be achieved. Utility Revenue Allocations F.. It is the policy of the City of Woodburn that revenue generated by City owned utilities will be split between capital funds and operating expenses in a manner consistent with Woodburn’s Capital improvement plans and operating requirements. The allocation, or split, of these revenues will be approved annually as part of the budget processes. Utility Rates G.. The City will maintain utility rates at a level thatensuresthat all debt service, operating and capital costs are adequately recovered. Capital costs identified in approved capital improvement plan will be used as the basis for forming the capital costs recovery portion of utility rates. System Development Charges H.. As permissible under state law, the City will pursue the recoveryof infrastructure-related development cost relating to water, sewer, street, storm and parks. These costs will be delineated via a defensible methodology, which will be revisedfrom time to time to ensure accuracy. Street SDCReserve I.. The Street SDC Fund will not be depleted below the estimated balance outstanding on the City’s contribution to the Woodburn I-5 Interchange Project.The Street SDC Fund resources will be focused on the Woodburn I-5 Interchange Projectuntil the liability is settled with the Oregon Department of Transportation. 4 23 SECTION 5. FUND RESERVES &CONTINGENCIES PERS Reserve Established A.. Due to expected PERS rates increases over the next three legislative biennia the City Council is hereby establishing a PERS General Fund Reserve (PERS Reserve). The PERS Reserve is intended to help manage General Fund service impacts associated with any future PERS rate increases. It is the goal of the City to hold at least $250,000 in the General Fund PERS Reserve pending future rate increases. General Fund Contingencies B. . Not including the PERS General Fund Reserve, and consistent with Government Finance Officers Association (GFOA) best practices, at least 17% of the General Fund’s operating appropriation shall be placed into the operating contingency to meet cash flow needs with the expectation. In addition, it is the goal of the City to preserve contingences to the greatest extent possible for the purposes of rolling contingency balance into the following year’s General Fund’s Beginning Fund Balance. C.The City re-establishes the ShortfallManagement Reserve (SMR). General Fund Contingency Proportionality D.. If possible, when contingency is expended overall reductions will be made to the General Fund in a manner to preserve a 17%General Fund contingency. Water & Sewer Fund Contingencies E.. The Water and Sewer Funds will maintain annual contingencies of not less than 5%. SECTION 6. GRANT APPLICATIONS(ALL FUNDS) Approval to Pursue A..The City Administrator’s approval is necessary before any employee pursues lobbying efforts on matters having budget implications, and before grant applications are submitted to the granting agency. Department Heads should advise the City Administrator before official positions are taken on matters that might have budget implications. General Fund Matching Funds B.. Upon approval by the City Administrator, matching fund requirements will be presented to the City Council for final approval. SECTION 7. NEW POSITIONS, PROGRAMSAND OVERTIME(ALL FUNDS) Base Budget & New Positions A.. Departments are to prepare “base budgets” with no new regular positions unless specifically authorized by the City Administrator in advance of Budget preparations. Reorganizations of departments or programs resulting in changes in staffing or positions may be considered if the change is cost neutral or a cost savings from the current costs. No position compensation or increase will be provided beyond amounts budgeted for the position. Considerations of New Positions/Programs B.. Unless otherwise authorized by the City Administrator, consideration of new programs and positions will occur only if the cost of the position or program is offset by non-General Fund sources legally tied to the new position or if the cost of the position is offset by new external revenues, reductions within existing funds and/or the position is required to generate those revenues. Cost estimates for new positions will include office facility space, equipment, rent, utilities, supplies, related increases in overhead services, etc. 5 24 Additional personnel or programs shall be requested only after service needs have been thoroughly documented or after it is substantiated that the new employees will result in increased revenue or enhanced operating efficiencies. Annual Overtime Budgets C..Departments will anticipate their annual overtime costs to be included the Proposed Budget. Once the Budget is adopted, overtime costs are to be managed within adopted levels. No overtime costs can exceed budgeted levels without first obtaining the authorization of the City Administrator. SECTION 8. MID-YEAR BUDGET REDUCTIONS Revised Revenue or Expense Estimates A.. If additional information concerning revenue reductions or significant expense increases becomes available after the start of the fiscal year, it may be necessary to make budget adjustments.These adjustments will be made in accordance with the City Council’s adopted Resource Reduction Strategy. SECTION 9. MID-YEAR REQUESTS, GENERAL FUND CONTINGENCY(ALL FUNDS) Non-Emergency Requests.In those cases where a department is required to absorb an A. unanticipated cost beyond its control of a non-emergency nature, departmental resources must first be exhausted prior to a transfer from General Fund contingencies. Upon conducting a final financial review of departmental budgets towards the end of the year, a transfer from contingency will be made to cover unanticipated costs that could not be absorbed throughout the year. Emergency Requests B..Emergency requests during the fiscal year will be submittedto the City Administrator for recommendation and forwarded to the City Council for consideration. SECTION 10.COMPENSATION & BENEFITS (ALL FUNDS) Wage Policy A.. Historically, the biggest factors forcing budget growth are increases in employee compensation and increased benefit costs. The City will have a compensation and benefit program that: 1) reflects the value of work performed by our employees, 2) compares favorably with the compensation and benefits paid for similar work in both the private and public sectors, and 3); considers the community’s ability to pay. Both our employees and the public must understand the mutual respect that such a policy warrants. Health Care & PERS Costs B.. Continue the City’s policy on wages and salary increases which evaluates the increased cost of health insurance and PERS contributions as part of the total compensation package. It is the goal of the City to reduce annual escalations of health insurance, and other benefit costs by getting the employees to bear an equitable portion of the annual premium increases and/or selecting lower cost benefit programs. Cost of Living Adjustments (COLA) A.. The City Administrator will make a recommendation either to include, or not include, a COLA for non-represented employees in the Proposed Budget. COLAs included in the Proposed Budget are considered and approved by the Budget Committee and City Council as part of the budget process. COLAs or other compensation provided for in collective bargaining agreements will be provided for in the annual Proposed Budget. Step Adjustments B.. Budgeted personnel services expenditures will include an amount to account for annual step adjustments for all employees who are not currently at the top of their range. 6 25 Annual employee step adjustments will not exceed 5% without the expressed permission of the City Administrator. SECTION 11.BUDGET CONTROLS Legal Compliance A.. The City Administrator and Finance Director will continue to review and control departmental budgets at the appropriation level. Personnel Services & Benefits B. . With the exception of overtime pay and temporary help accounts, which shall be developed by Department Heads with the advice of the Finance Director and the approval of the City Administrator, personnel services and benefits cost calculations will be provided by the City Administrator and the Finance Director and will be used as provided. The City Administrator and the Finance Director will also provide estimates for insurance and internal services costs. These amounts will not be altered by Department Heads. Wages & Benefit Control C. . Positions not entitled to receive benefits will be managed in a manner that keeps them below mandatory benefit thresholds (such as PERS, health insurance, etc.).Positions will only be eligible for benefits if approved by the City Administrator and/or designated in Job Descriptions. All benefit costs must be anticipated and included in the annual Budget. One-Time Revenues D.. One-time revenues will be used only for one-time expenses. SECTION 12.UNAPPROPRIATED ENDING FUND BALANCES(ALL FUNDS) Limit UnappropriatedEnding Fund Balances. To provide the most budget flexibility during A. the year, limit the use of unappropriated ending fund balances to circumstances where they are required by law. Rather than use unappropriated fund balances, the goal should be to place any monies not needed for current expenditures in the relevant funds’ operating contingencies. SECTION 13.CAPITAL IMPROVEMENT GUIDELINES Capital Improvement Program A.. A 6-year Capital improvement Program will be adopted as part of the annual budget process. It will include all projects anticipated to be initiated and/or delivered in the 6-year planning period. The Capital Improvement Program will be consistent with the City’s adopted Capital Improvement Master Plans. Funding availability will determine the rate at which Capital Improvement program projects are initiated or completed. Exceptions B.. The City will fund dedicated programs and services with dedicated funding sources. Exceptions may be made, on a case-by-case basis, by the Budget Committee, City Council or by the City Administrator if appropriate. One criterion will be whether the City would incur more costs elsewhere as a result of the reduction. Capital Planning Consideration. Recognizing that it does not necessarily make sense to fund C. current operations at the expense of long-term capital or planning programs, every effort will be made to continue capital and planning programs geared to the City’s long-term needs. 7 26 SECTION 14. DEBT ISSUANCE (ALL FUNDS) Debt Issuance A.. The City will only issue debt in accordance with adopted Master Debt Resolutions for Sewer and Water. General Obligation debt will only be issued in compliance with state statutes. Debt will only be issued (for all fund types) when a dedicated resource is available to meet the required debt service and reserve. Interfund Transfers B..Interfund transfers are allowed if the City Council determines the transfer to be in the best interest of the City. All interfund transfers will be managed consistent with state budget law. No debt will be issued without the approval of the City Administrator and authorization of the City Council. SECTION 15. ANNUAL FINANCIAL AUDITS Annual AuditRequired A.. The Oregon Municipal Audit Law (ORS 297.405 – 297.555) requires a financial audit and examination be made of the accounts and financial affairs of the City at least once a year. Consistent with State law, the City of Woodburn will conduct an annual independent audit of the preceding fiscal year. Audit Standards B..Woodburn’s annual financial audits will be conducted in accordance with auditing standards generally accepted in the United States. Those standards require that an independent auditor plan and perform the audit to obtain reasonable assurance about whether the basic financial statements are free of material misstatement. The audit will examine, on a test basis, evidence supporting the amounts and disclosures in the basic financial statements. The audit will also assess accounting principles used and significant estimates made by management, as well as evaluating the overall basic financial statement presentation. The audit will contain an assessment of the City’s internal financial controls and procedures make any necessary recommendation for improvement. Finance Director and CityAdministrator Oversight C..It will be the responsibility of the Finance Director and the City Administrator to oversee the annual audit process. Preparation of Financial Statements D.. When feasible, City staff will prepare and provide annual financial statements to the auditor’s satisfaction. If staffing levels or other barriers exist to internal preparations of financial statements, the City Administrator may authorize the auditor’s preparation of financial statements for the purposes of completing the annual audit on time. Audit Deadlines & Extensions E.. Per Section 15 (F), the Annual Audit will be presented to the City Council no later than December 31. Consistent with State law, the annual Audit will also be filed with the Oregon Secretary of State’s Audit Division no later than December 31. The presentation of the Audit to the City Council and filing with the Secretary of State’s Office may occur later than December 31 if an audit filing extension is granted by the Secretary of State’s Office. Any and all requests for audit filing extensions must be approved by both the City Administrator and the Auditor. In the event that an audit filing extension is requested and/or granted, the City Administrator will inform the City Council of the reason for the extension request and estimated time line for completing, presenting and filing the audit. Audit Presentation to Council F..The annual audit findings will be presented to the Woodburn City Council during a regularly scheduled City Council meeting by a representative of the audit 8 27 firm. All audits presented to the City Council must be complete and signed by a representative of the audit firm. Budget Committee Review G. . A copy of the Annual Financial Report will be provided to the Woodburn Budget Committee for their review. SECTION 16.PROGRAMS Discretionary Programs A. . To the extent additional discretionary resources are available, high priority services areas will be slated for growth in discretionary support. Lower priority service areas will receive constant or decreasing discretionary support. Based on the direction of the City Council, discretionary programs are identified, and prioritized, as follows: Discretionary Programs Police Patrol & Public Safety Police Support Services Financial Services Legal Services Land Use Planning Economic Development Code Enforcement General Administration Library Aquatic Center Recreation Programming Parks and Park/Tree Maintenance Other General Fund Supported Non-Essential Program & Services Computer/Network transfers (capital replacements of desktop pc’s and associated servers) Discretionary Transfers (i.e. Transit, Streets, RSVP, etc.) Community Services (i.e. flower baskets, TOT Grants –where permissible, etc. Intergovernmental Agreements that provide no direct offsetting revenues SECTION 17.RESOURCE REDUCTION STRATEGY(ALL FUNDS) Goal & Reduction Approach A. .When faced with a potential reduction in resources, the City’s goal is to continue to provide services in a professional, effective and efficient manner. Consequently, to the extent possible, across-the-board reductions in expenditures will be avoided. Case-by-Case Consideration B..Reductions will be made on a case-by-case basis, focusing on each individual program or service. If possible, reduction will be made proportional to the programs and services identified by the City Council. Moderation When Possible C..If, as a result of loss of a significant amount of discretionary resources, expenditure reductionsbecome necessary, those reductions will be made in moderate case-by-casereductions in discretionary supported programs and services. These reductions will focus first on programs funded by dedicated resources and thenservices funded by discretionary resources. Discretionary Contributions.If further reductions are required, any discretionary funding that D. supplements or supports services mostly supported with dedicated resources will be reduced or 9 28 eliminated. This may apply to programs or activities expanded or started with discretionary resources within the last few years. Exceptions may be made on a case-by-case basis by the City Council. Furlough Days E..If personnel budget/salary saving are required, the City will consider a reduced work week or furlough days prior to laying off staff. Consideration List F. . Discretionary funding for programs funded by discretionary resources will be reduced or eliminated as needed. Legal restrictions or the City’s ability to maintain minimal service levels will be considered. The City Administrator can determine the appropriate level of consideration at his/her sole discretion when making mid-year reductions or comprising the annual Budget proposal. Based on the direction of the City Council, the order of City service areas to be considered for reductions are: Consideration List Intergovernmental Agreements that provide no direct offsetting revenues Community Services (i.e. flower baskets, TOT Grants –where permissible, etc.) Discretionary Transfers (i.e. Transit, Streets, RSVP, etc.) Computer/Network transfers (capital replacements of desktop pc’s and associated servers) Other General Fund Supported Non-Essential Program & Services Parks and Park/Tree Maintenance Recreation Programming Aquatic Center Library General Administration Code Enforcement Economic Development Land Use Planning Legal Services Financial Services Police Support Services Police Patrol & Public Safety Indirect Costs G. . The City’s overhead programs will not be prioritized, but will be sized to the need and size of the overall organization. Generally, wherever possible, the City’s goal is to make fee-supported programs self-sufficient. This includes recovering those programs’ appropriate share of the City’s overhead costs. If reductions occur, then indirect costs will be sized to the needs and size of the rest of the organization. Dedicated Funding for Programs H.. Where legally possible, the City will consider using dedicated resources to fund high priority programs related to the purpose for which the dedicated funds are received. 10 29 Five-Year Forecast Fiscal Years 2017- 2021 Finance Department February 16, 2016 30 (Page Intentionally Left Blank) 31 City of Woodburn Five-Year Forecast FY 2016-17 - FY 2020-21 Table of Contents Introduction ............................................................................................................................................................................ 1 City of Woodburn Background ............................................................................................................................................ 1 Purpose of the Forecast ...................................................................................................................................................... 1 Forecast Methodology ........................................................................................................................................................ 1 Executive Summary ................................................................................................................................................................. 2 Overview ............................................................................................................................................................................. 2 Economic and Demographic Assumptions ......................................................................................................................... 2 Issues in the Coming Year ................................................................................................................................................... 3 Issues Beyond One Year ...................................................................................................................................................... 3 General Fund ........................................................................................................................................................................... 5 Building Inspection Fund ......................................................................................................................................................... 7 Transit Fund ............................................................................................................................................................................ 8 Street Fund .............................................................................................................................................................................. 9 Water Fund ........................................................................................................................................................................... 10 Sewer Fund ........................................................................................................................................................................... 11 Remaining Funds ................................................................................................................................................................... 13 Major Assumptions Revenues ............................................................................................................................................ 14 Major Assumptions Expenditures ...................................................................................................................................... 15 Glossary ................................................................................................................................................................................. 16 32 Introduction City of Woodburn Background The City of Woodburn is located within Marion County in the populous northern Willamette Valley, approximately halfway between the larger urban areas of Portland and Salem. The population of the region within a 30-mile drive of Woodburn is 2.1 million, according to the American Community Survey. The economy of the immediate area around Woodburn has historically been centered on agricultural and forest products, with the City serving as the manufacturing and services hub for these two sectors. Food processing and agricultural services continue to be very important parts of the local economy. Another important factor in the local economy, as nearby urban populations have grown, Woodburn has adapted by attracting a variety of new businesses ranging from metal fabricating, warehousing, regional retail and a wide range of service-providing businesses. Woodburn has changed significantly in population since it was first incorporated in 1889. The City originally began as a small farming and manufacturing community. Beginning in the 1960s Woodburn became a suburb of Salem and Portland with its proximity to I-5. As of the census of 2000, 20,100 people resided in Woodburn. As of 2010, its population had risen st to 24,080 a net rise of 19.8% over 2000 ranking it the 21 most-populated city in Oregon. The per capita income was $16,249 (compared to $26,702 for the state), and the median income for a family was $41,818, or 16% less than the state median household income. The population of Woodburn, as of July 2015, was 24,670. 2020 is 34,919. opulation projections indicate Woodburn will grow to 37,216 by 2030. Purpose of the Forecast The Five-most significant fund revenues and expenditures with the purpose of identifying financial trends, shortfalls and issues so the City can proactively address them. For the purposes of the financial outlook, we strive to look at operating revenues (those revenue sources not subsidized by beginning fund balance) versus operating expenses. Future result unavoidable future impacts. Existing fund balances will be considered available for one-time expenditures only, whenever possible. The financial forecast serves as a basis of the Cit financial plan for its primary operational funds, which influence changes . The intent of this financial forecast is to project ion under certain assumptions. The forecast then sets the stage for the budget process, aiding both the City Administrator and City Council in establishing priorities and allocating resources appropriately. Responsible financial stewardship is imperative to provide for the current and future needs of the community. Forecasting is one of the most powerful tools the City has Forecast Methodology roach to forecasting is to apply a conservative philosophy that neither overstates revenues nor understates expenditures. Economic forecasting is not an exact science. Rather, it is dependent upon the best City of Woodburn Five-Year Forecast 2016-17 to 2020-21 1 33 professional judgment of the forecaster. To enhance the accuracy of projections, the City identifies factors that contribute to the changes in revenues and expenditures, such as development, inflation, interest rates and known future events that will affect operations. Forecasting of operating costs embraces the concept of status quo. This concept assumes that the current level of service will continue for the next Five-Years with cost changes based on inflationary increases. This provides a baseline economic estimate from which reductions or increases in service levels can be determined. To the extent certain reductions or additions are anticipated, they are noted within the fund section of this report. Exceptions to the status quo assumption are noted at the beginning of each fund. Because capital improvements are based on available resources, a long-term forecast is not useful for budgeting purposes. Master plans governing our long-term investments in Water, Sewer, Transportation, Storm Water, and Parks have been established. Projects are prioritized based on the master plans, but are scheduled based on available resources which, due to variations in growth rates, are not readily predicted. To the extent possible, operations are funded first and remaining resources are allocated to fund capital improvements. This frequently means that improvements are delayed to achieve the matching funding source. Improvements which are too expensive to be paid from net resources are assumed to be funded via bonded debt, although in practice, this is a rare occurrence. For these reasons, capital construction funds and the related special revenue funds, are not included in this forecast. Utilizing general ledger records and reports, audited financial statements, water and sewer master plans/rate studies and published City budgets, each of the funds listed below were examined to identify patterns in revenues, expenditures and cash balances that may indicate financial instability or threats to sustainability of current operations. Executive Summary This report is a combined effort of all City staff. Each department provided insight into future year operating revenues and costs. The goal in assembling this report is to reveal trends, highlight financial issues and provide suggestions and options. We look forward to feedback and input from the City Council and other interested parties on these issues. Because the fund section provides detailed information, the executive summary will focus on the most significant issues facing the City. Overview The forecast model predicts that most operating funds will have sufficient resources to meet expenses over the five-year period. A few of the fund graphs depict a declining undesignated balance of resources. While this may seem alarming, it is just an indicator. In reality, the City would not submit a proposed budget where costs exceed all available resources. The value of the forecast is that it allows us to predict where problems might occur and provides the City adequate time to take corrective action before the situation becomes a crisis. Economic and Demographic Assumptions Oregon as a whole is expected to grow with a modest annual population growth rate of 1.1% to 1.25% between 2016 and 2020. rowth. economy determines the ability to retain local workforce as well as attract job seekers. These factors will weigh heavily City of Woodburn Five-Year Forecast 2016-17 to 2020-21 2 34 Issues in the Coming Year Continued focus on stabilizing General Fund finances The Urban Growth Boundary (UGB) issue leaves a lot of uncertainty about future development and future demands on water, sewers, streets and building activities Expansion of the Economic Development program Issues Beyond One Year tǒĬƌźĭ 9ƒƦƌƚǤĻĻƭ wĻƷźƩĻƒĻƓƷ {ǤƭƷĻƒ Λt9w{Μ The City participates in the Oregon PERS State and Local Government Rate Pool, which is projecting that rates will increase 20% at the beginning of the next biennium, which is June 30, 2017. While a 20% increase is significant, the rates are also expected to increase another 20% in June 30, 2019. Unfortunately, the 20% projection is not worst case scenario. A significant drop in the market could change the 20% increase to 40% per biennium. Also, services that require more skilled labor will be impacted more by the growth rate because employees are more likely to be Tier 1 or 2, which already have higher rates. IĻğƌƷŷ LƓƭǒƩğƓĭĻ Though the City has implemented a high-deductible health plan and attempted to control health insurance costs the growth rates on some policies continue to exceed 15%. An assumption of 10% growth in insurance rates has been used here. There is a great deal of uncertainty in health care premiums and the implications of the Affordable Care Act. DĻƓĻƩğƌ CǒƓķ New demands for services will need either new resources or program cuts in other areas. The Police Department budget represents approximately 90% of the Property Tax revenue and will continue to be a priority in budgeting. The challenge for the City will be to continue to provide a high level of service with only modest increases in revenues. Demand for park and recreation services are expected to continue to increase due to increases in population and put additional strain on the limited resources of the General Fund. In addition, the facilities funded by the General Fund, including City Hall, the library and the aquatics center still have a significant amount of deferred maintenance. The City levies a franchise fee on private utilities for the use of the City right-of-way. For the first time in FY 2013-14, the City levied this franchise fee on its own utilities and the 5% general right-of-way charge was approved for a five-year period and City Council voted in 2016 to continue the charge without an end date. ğƷĻƩ The operational fund is in relatively good shape, but that is largely at the expense of setting aside rate revenue for future capital expansion. Demand for new services has been low, but may see significant increase in the next five years. UGB expansion is uncertain and what capacity improvements are needed is unknown. City of Woodburn Five-Year Forecast 2016-17 to 2020-21 3 35 ƩğƓƭźƷ Historically, the General Fund provided $151,000 annually to the Transit Fund; that support has declined to $116,000, resulting in reductions in service hours and routes in recent years. The transit operation is aggressively seeking grants to fund operations and maintain and/or increase current levels of service, but a restoration of some of the General Fund subsidy may be necessary to sustain the program in the long term. Recent capital investments in vehicles and shelters were largely grant funded. {ĻǞĻƩ Major expansion at the Wastewater Treatment Plant (WWTP) has been on hold waiting for a decision from DEQ regarding the water quality limits for temperature. This brings uncertainty for the Sewer Fund because project costs will be more than estimated due to the multi-year delay. See the Sewer Fund on page 11 for further detail. Also, the UGB expansion is uncertain and what capacity improvements are needed is unknown. {ƷƩĻĻƷƭ Due to economic conditions, Street SDC revenues have remained flat and are expected to remain flat. The City paid the $4.2 million remaining balance to ODOT for the I-5 interchange project. Several street projects were delayed to maintain an adequate Street SDC balance. Now that this project is resolved existing projects will be prioritized. City of Woodburn Five-Year Forecast 2016-17 to 2020-21 4 36 General Fund Variances from Status Quo Assumptions None Key Assumptions PERS Rate Increase 20% as of July 1, 2017 General Fund Right-of-Way Charge on Water & Sewer continues Operating Position Property taxes account for almost 70% of the annual revenues in the General Fund. Property tax revenues are no longer declining, but there is uncertainty surrounding the recent appeal award largest taxpayer. Though residential values are increasing, the City has industrial and other property types that continue to lag behind. Property taxes will increase if there are significant new developments within City limits, but it takes several years to see the income increase. In the first few years of this forecast the City does not expect to receive the 3% increase allowed by statute. Franchise fees, the second largest revenue in this fund, are based on the gross revenues collected in Woodburn of utilities that use the -of-way. Private utilities doing business in the City of Woodburn include Portland General Electric, Northwest Natural Gas, Qwest, Republic Services, Wave Broadband, Woodburn Ambulance and others. The only way this source of revenue will increase is if the private utilities revenues derived from Woodburn residents also increase. Intergovernmental is the third largest type of revenue at 5%. This type includes state and federal grants, and state cigarette, liquor and revenue sharing. Overall, revenues are projected to increase at a modest 2% rate for the forecast period. City of Woodburn Five-Year Forecast 2016-17 to 2020-21 5 37 Capital Projects From Operating Revenues The City has a number of deferred maintenance projects, which continue to be postponed. The 2014-15 budget included funding for the most critical needs, such as city hall roof and HVAC replacement, a significant mower replacement and other facilities-related needs. However, the City Hall Roof and HVAC replacement project were reduced to critical repairs only. Potential Impacts and Issues There are potential future demands that could increase costs in this fund; however, there are no available resources for these expansions. Potential future demands are explained below. tğƩƉƭ ε CğĭźƌźƷźĻƭ ağźƓƷĻƓğƓĭĻ Fund to provide enhanced services. Additional staff hours are required for cleanup and maintenance of these parks. These potential cost increases are not included in the forecasts. Facilities maintenance continues to be a challenge with aging buildings requiring increasingly expensive repairs and maintenance. tƚƌźĭĻ {ƷğŅŅźƓŭ While population continues to increase, there has not been a proportional increase in development resulting in increased tax revenues. This phenomenon places an increased burden on the demand for police services without commensurate revenue increases. City of Woodburn Five-Year Forecast 2016-17 to 2020-21 6 38 Building Inspection Fund Variances from Status Quo Assumptions Permit revenues are have shown significant increase in FY 2015-16 Additional position approved in FY 2014-15 Supplemental Budget, currently unfilled Operating Position Revenues are based on permits issued for new development and redevelopment that historically ebbs and flows. Permits are collected prior to the work being done, therefore cash balances exist to pay for services to be performed in the future. Future revenues are based on estimates of when specific projects might begin. Costs reflect cuts and reductions already in place and estimated inflationary influences. Potential Impacts and Issues Delays in developers submitting plans or starting construction will impact the bottom line. The City will closely monitor the actual revenues against the forecast and will take corrective action if necessary. A return to a normal level of development necessitated a return to historic staffing levels. Revenues for the current year continue to be ahead of budget year to date, but it is uncertain whether the pattern will continue throughout the year. The revenue projection was maintained at a conservative level. The Building Fund, of course, will be significantly impacted if the UGB is not expanded, as the City is running out of residential and industrial lots. There are quite a few commercial building opportunities that could sustain revenues for several years though. Approximately 50% of the Woodburn School District bond allows for significant construction work to all the school buildings for repairs, additions and two new schools. The school bond passing will have a big impact on the Building Department workload and revenue over the next five years, but it may also require additional staff and vehicles. City of Woodburn Five-Year Forecast 2016-17 to 2020-21 7 39 Transit Fund Variances from Status Quo Assumptions None Key Assumptions Ability to continue to obtain grant funding General Fund contribution remains stable for forecast period Fares remain consistent for forecast period Operating Position ransit system provides fixed route bus operations as well as Dial- a-Ride services for disabled citizens. The transit operation is funded by a contribution of $116,000 from the General Fund, approximately $30,000 in fare revenue with the balance made up from state and federal grants. The City continues to monitor the availability of state and federal funds for this program and manages staffing and service levels to available resources. Capital Projects From Operating Revenues Replacement of buses and vans is done as-needed and historically has occurred when grant funding is available. The spike in Capital Outlay in FY 2014-15 was for grant funded purchases. Potential Impacts and Issues Should a large, unanticipated curtailment of state and/or federal grant revenue occur, this program could potentially be drastically curtailed or discontinued as replacement funding is not anticipated to be available from the General Fund. In addition, the declining fund balance displayed at the end of the forecast horizon may necessitate General Fund support of the transit fund. The landscape recently installed at the new Woodburn Memorial Transit Facility will likely generate additional maintenance costs during this five year period. City of Woodburn Five-Year Forecast 2016-17 to 2020-21 8 40 Street Fund Variances from Status Quo Assumptions None Operating Position State gas taxes are the largest source of revenue for this fund. Privilege taxes paid by PGE and NW Natural are another large revenue stream. Privilege taxes are dependent not only on population growth, but can also be impacted by weather patterns. Street projects that had previously been budgeted as capital projects have been reevaluated and are now funded as operational expenses in the Street Fund. These include resurfacing projects that do not significantly reconstruct the roadbed, increase lane size or capacity. Capital Projects From Operating Revenues Projects related to, but not a part of, the I-5 Interchange Project, were funded in FY 2013-14. This is the cause of the sharp increase in transfers for FY 2013-14. In FY 2014-15 a change was made to correctly classify maintenance activities such as resurfacing streets as maintenance and not capital and budget these maintenance activities within the Materials and Services budget instead of Capital Outlay. Potential Impacts and Issues Due to the increase in the gas tax, registration and other fees and the shifting of shared revenues (to cover street lighting expenses) to this fund, financing remains relatively stable for the forecast period. However, unusually mild weather can flatten the privilege tax revenues. The new I-5 Interchange landscaping will likely generate additional maintenance costs during this five year period, which would be a cost of this fund. City of Woodburn Five-Year Forecast 2016-17 to 2020-21 9 41 Water Fund Variances from Status Quo Assumptions None Operating Position Revenues and treatment costs are driven by consumption, which due to increased conservations efforts by the City should continue to decline over the forecast period. An update to the rate study and Master Plan may reveal the need for a rate adjustment. Management is monitoring these cost progressions and is working on recommendations for any revenue short falls in ensuing fiscal years. Potential Impacts and Issues As personnel, material and services costs continue to increase, levels of service will become difficult to maintain. Management is recommending the 2001 Water Master Plan and water rates be reviewed and updated as needed. UGB expansion is uncertain and what capacity improvements are needed is unknown. This will greatly impact decisions in regard to future capital and rate structures. City of Woodburn Five-Year Forecast 2016-17 to 2020-21 10 42 Sewer Fund Variances from Status Quo Assumptions None Operating Position To fund the ongoing capital projects the City Council approved rate increases. The last increase was effective in FY 2014-15 at 9.5%. In FY 2014-15, a change was made to correctly classify maintenance activities such as repairs of sewer lines as maintenance and not capital. The City accounted for these maintenance activities within the Materials and Services budget instead of Capital Outlay. Potential Impacts and Issues In 2007 the City entered a Mutual Order Agreement (MAO) with the Department of Environmental Quality which established an implementation framework, interim effluent limitations and schedule for completing improvements to the wastewater facility for compliance with winter-time ammonia limits and temperature total maximum daily load (TMDL). The temperature TMDL per the MAO was to be based on the findings of a separate water quality analysis that was currently being conducted by DEQ for the Mollala-Pudding Rive Subbasin. The Mollala-Pudding River Subbasin TMDL was issued by DEQ December 2008 and was subsequently approved the U.S. Environmental Protection Agency. An evaluation report was submitted to DEQ in April 2009, which provided the framework, implementation schedule and identified the required improvements needed to meet compliance with the established limits. To fund the needed future wastewater treatment plan compliance upgrades the City sold Wastewater Revenue and Refunding Bonds November 2011. Based on the evaluation report approved by DEQ, final design plans were prepared and submitted to DEQ January 2012 to meet the compliance deadline of the MAO. In August 2013 EPA provided notice to DEQ, disapproving of Oregon Water Quality Standards; Natural Conditions Criteria for Temperature and Statewide Narrative Natural Conditions Criteria in general. Pudding River TMDL for temperature established in 2008 was established using natural criteria and could no longer be used for permitting. City of Woodburn Five-Year Forecast 2016-17 to 2020-21 11 43 Staff has been working with DEQ to update the current MAO to reflect the changes, limits and timeline that have been National Pollutant Discharge Elimination System permit will not be renewed, nor can the City move forward with upgrades at the Water Treatment Plant as related to temperature compliance. Currently an outcome and timeline for DEQ in resolving temperature limits for water bodies that cannot meet numeric criteria is not known. Though the City has issued approximately $43 million in bonds for the project, many portions of the project are stalled until a decision is made. This brings uncertainty for the Sewer Fund because project costs will be more than estimated due to the multi-year delay. UGB expansion is uncertain and what capacity improvements are needed is unknown. This will greatly impact decisions in regard to future capital and rate structures. City of Woodburn Five-Year Forecast 2016-17 to 2020-21 12 44 Remaining Funds Capital Construction Funds Capital Construction Funds are not included in this forecast because their activity is limited by funds available. A more robust capital construction plan and reporting mechanisms were implemented for development during the 2014-15 budget cycle. Remaining Funds The remaining 22 funds have dedicated revenue sources, are for a specific purpose, or have nominal activity. These funds have not been included as part of the Five-Year Forecast. City of Woodburn Five-Year Forecast 2016-17 to 2020-21 13 45 Major Assumptions Revenues The assumptions for this forecast are based on historical trends and expected growth without the UGB expansion. Most that may generate offsetting expenses in the short run. Revenue Assumptions tƩƚƦĻƩƷǤ ğǣĻƭ DĻƓĻƩğƌ CǒƓķ Taxes are based on assessed value which is determined by the Marion County Assessor. Generally, assessed values grow by 3% per year as allowed by the state constitution. There is no correlation between real market value and assessed value. The City must also allow for the effects of compression, which in the recent years has resulted in the loss of significant revenue. The Cis permanently set at $6.0534 per $1,000 of assessed value, but is subject to limitation under Ballot Measures 5 and 50 limitations. The City has large taxpayers with values that are not increasing at the high rates of residential properties, some values even continue to decline. As a result of these factors, the City estimates property tax growth to be below 3% for the first several years of the forecast. Even with uncertainty surrounding the assessed value of his is a more optimistic growth rate than prior forecasts because property tax compression seems to be reversing in the City. CƩğƓĭŷźƭĻ CĻĻƭ DĻƓĻƩğƌ CǒƓķ -of-way. Rates vary by type of utility ranging from 3% to 8%. Franchise fees are assessed on telecommunication, cable television, natural gas, electric utilities, ambulance and garbage. These revenues are expected to grow at a slow rate (less than 2%) for the forecast period. /ŷğƩŭĻƭ ŅƚƩ Dƚƚķƭ ε {ĻƩǝźĭĻƭ ƷźƌźƷǤ ƭĻƩ /ŷğƩŭĻƭ Water: The forecast assumes a 2% annual increase due to typical new development. Sewer: The forecast assumes a 2% annual increase for growth. The last rate increase adopted by City Council was effective July 1, 2014 at 9.5%. Dğƭ ğǣĻƭ The State Gas Tax is estimated with a growth rate of 2% per year. .ǒźƌķźƓŭͲ tƌğƓƓźƓŭ ğƓķ 9ƓŭźƓĻĻƩźƓŭ tĻƩƒźƷƭ Permit revenues are based on identification of specific developments with assumptions based on which fiscal year the development is likely to begin. City of Woodburn Five-Year Forecast 2016-17 to 2020-21 14 46 Major Assumptions Expenditures Personnel Services Wages are assumed to increase by 2.5% per year across all funds and all labor groups. This is a conservative estimate considering that several labor contracts include a 2% cost of living adjustment and step increases that are often 3%. As mentioned previously, a growth rate of 10% has been used for insurance costs. PERS rate assumptions vary somewhat by fund. The current average rate for each fund was determined, then a 20% growth rate was applied for each of the next two biennium. Material and Services Impacts of inflation are assumed to remain minor over the five years, remaining stable over the forecast period at 2% to 2.5%. Management has been aggressive in managing costs in this category to help offset growth in personnel services costs and has been successful in holding spending well under budgeted amounts. other insurance rates may cause this category to exceed the management targets as years pass. Capital Equipment The Public Works Fund maintains a replacement reserve for capital equipment replacement and is funded via transfers from the Water, Streets and Sewer funds. The General Fund replaces equipment on an as-needed basis or emergency basis, with emphasis on whether funding is available. Debt Service Estimates are based on amortization schedules for outstanding debt issues. City of Woodburn Five-Year Forecast 2016-17 to 2020-21 15 47 Glossary Capital Projects New construction and major repa Operating Position Recurring revenues and recurring expenditures Potential Impacts Refers to issues and challenges that are in addition to the status quo. The intent is to inform the reader of economic matters that might occur during the forecast period. Recurring Expenditures The expense portion of status quo, predictable and on-going costs Recurring Revenues The resource portion of status quo, predictable and ongoing revenues Revenues Includes both recurring revenues and transfers in Status Quo The current level of services Transfers In Internal charges by General Fund for services provided to other funds Urban Growth Boundary (UGB) to control urban expansion onto farm and forest lands. City of Woodburn Five-Year Forecast 2016-17 to 2020-21 16 48 Agenda Item February 22, 2016 TO :The Honorable Mayor and City Council FROM:Scott C.Derickson, City Administrator SUBJECT: Transient Occupancy Grant Distribution and Proposed Three-Year Agreement with the Woodburn Area Chamber of Commerce RECOMMENDATION: Au thorize the renewal of a proposed three-year agreement, effective July 1, 2016through June 30, 2019(see Exhibit A) with the Woodburn Area Chamber of Commerce. The proposed agreement provides $50,000 per year and requires program deliverables, timelines and reporting. BACKGROUND: During the February 8, 2016City Council meeting, both the City Economic Development Director and the Chamber of Commerce’s Executive Director presented the overall goals of the City’s draft Economic Development Plan, and more specifically tourism and the City’s proposed tourism partnership with the Chamber of Commerce.During the presentation, the City Administrator discussed the proposed tourism partnership as a renewal of the expiring Transient Occupancy Tax (TOT). The newly proposed TOT agreement between the City and the Chamber of Commerce compensates the Chamber of Commerce for defined activities consistent with the City’s draft Economic Development Plan’s tourism goals. Councilor’s should also note that the Chamber of Commerce’s Board of Director’s discussed the proposed TOT renewal agreement and approved it during their February 17, 2016 Board meeting. Our current three-year agreement terminates June 30, 2016. The proposed renewal of this agreement, which is for an additional three years, is being presented now so that both the City andChamber of Commerce have funding commitments for the purposes of annual budget preparation. Ordinance 2057gives the City Council broad discretion as to TOT funds and provides as follows: Agenda Item Review:City Administrator ___x___City Attorney __x____Finance __x___ 49 Honorable Mayor and City Council February 22, 2016 Page 2 . All revenue received fromthe Section23. Disposition of Tax Funds transient occupancy tax shall be accountedfor by a separate revenue line item contained in the General Fund. Sixty-six and two-thirds percent (66 2/3%) of all revenues received from the transient occupancy tax shall be used at the Council's discretion. Thirty-three andone-third percent (33 1 /3%) of all revenues received from the transient occupancy tax shall be dedicated to uses that promote and support tourism and economic development activities. Of the monies set aside for tourism and economic development the Council may, at its discretion, expend some or all of those monies on activities conducted by the City or other agencies that advance the Council's tourism and economic development goals. Monies distributed to agencies and organizations other than the City shall be dispersed pursuant to a tourism and economic development grant program. Policies and proceduresgoverning that program shall be established by City Council resolution. By renewing a three-year agreement with the Chamber of Commerce, it is estimated that the entire tourism allocation will be dedicated to fulfilling the agreement for the next three years. Councilorswill also note that the proposed agreement increases the annual allotment from $48,000 to $50,000 annually. If TOT revenues result in higher than expected allocations in upcoming years, the additional revenue may be used for grant purposes.If actual TOT revenues decrease, our agreement allowsthe City Council to adjust the payment to the Chamber of Commerce. Subject to the conditions of the agreement, the City will provide the Chamber with $50,000 in TOT funds each year for a three-year period. Consistent with the February 8, 2016City Council presentation, the agreement contains the following highlights: : The Chamber will, Year 1 Partner with the City in developing and completing a comprehensive survey of regional tourism assets, including the creation of survey instruments, methodology and the compilation and submission of data and reports. Developand implement a visitor/tourist survey designed to ascertain information regarding current tourism opportunities, strengths and challenges. Data from the survey will be compiled and presented in a report to the City. 50 Honorable Mayor and City Council February 22, 2016 Page 3 Work with the City to identify partners, and participants, in the City’s efforts to create and complete a Stakeholder Information Form. Work with the City in the creation of a City-led Tourism Task Force, including the identification of stakeholders and potential task force participants. : The Chamber will, Year 2 Be a member of the Tourism Task Force. Specifically, the Chamber will participate on the Tourism Task Force, helping the task force identify current and future goals and objectives as part of the City’s Tourism Development Plan. Assist the Tourism Task Force with implementation of goals and objectives as appropriate. Assist the City with the selection of a marketing consultant to assist the Tourism Task Forcewith branding and the creation of a Woodburn Marketing Plan. Participate in the branding effort in vetting potential brands and themes to Chamber membership for input and direction. The Chamber will also assist the City in presenting both the branding and Woodburn Marketing Plan to the City Council once completed. : The Chamber will, Year 3 Consult with City and assist in the development of Woodburn marketing material and events calendar. Create a new tourism website with mobile application consistent with the City’s Tourism and Marketing Plan. Develop a Tourism Resource Guide with the assistance of the City. Assist the City in efforts to create and install tourism-related kiosks in the Downtown area and at the outlet mall. Assist the City in tourism-related grant and grant funded projects. 51 Honorable Mayor and City Council February 22, 2016 Page 4 Currently, the FY 2015-16 Budget contains some $306,000in total TOT revenues with the $48,000 being allocated to the dedicated purposes of promoting tourism. From a budgetary standpoint, Woodburn began allocating and tracking TOT grants in FY 2008-09 with the creation of a TOT General Fund revenue/expenditure line item (GF Acct/199 Non-departmental).The 2016-17 Budget, which is currently being drafted, includes a $50,000 allocation. A summary of historical TOT grants provided to the Chamber is as follows: Summary of Chamber TOTGrants: FY 2001 – Proposed 2016 Fiscal YearAwarded to Chamber 2001-02$22,000 2002-03$14,764 2003-04$50,681 2004-05$26,500 2005-06$50,615 2006-07$43,899 2007-08$24,186 2008-09$61,939 2009-10$48,000 2010-11$48,000 2011-12$48,000 2012-13$48,000 2013-14$48,000 2014-15 $48,000 2015-16$48,000 TOTAL$630,000 FINANCIAL IMPACT: Based on Ordinance 2057 disbursement allocations, Woodburn’s current FY 2015-16 Budgetprovides approximately $48,000 in tourism related Chamber expenditures per the last year of our agreement,which has already been paid. Renewal of the agreement will require the City to budget at least $50,000 in TOT tourism funding, over the next three fiscal years, contingent upon the actual TOT revenue generated. The remaining portion of TOT funding is placed in the General Fund where it supports General Fund services and programs, including public safety, economic development, City-sponsored special events, etc. Increasing the amount of TOT funds dedicated to tourism would require a General Fund reduction as an offset. 52 Agreement for Services between City of Woodburn and Woodburn Area Chamber of Commerce This Agreement is made and entered into by and between the City of Woodburn, an Oregon municipal corporation (hereinafter the “City”), and the Woodburn Area Chamber of Commerce, an Oregon non-profit corporation, 979 Young Street, Suite A, Woodburn, Oregon, (hereinafter the “Chamber”), for tourism promotion activities, as described in this Agreement. WITNESSETH: WHEREAS, Ordinance 2057, the Transient Occupancy Tax Ordinance, imposes a Local Transient Occupancy Tax (“TOT”) consistent with the provisions of Oregon state law; and WHEREAS, the CityCouncil may in its discretion,consistent with Oregon state law and Ordinance 2057, distribute Tourism and Economic Development Funds to qualified community organizations over a multiple year period; and WHEREAS, Chamber is a qualified community organization capable of partnering with the City in performing tourism and economic development efforts; and WHEREAS, The City Council has identified tourism and economic development as ahigh priority and community goal; and WHEREAS, the parties understand and agree that all funds paid to the Chamber under this Agreement shall be as compensation for the Chamber’s efforts in assisting the City per Section 5 of this Agreement; and NOW, THEREFORE, in consideration of the terms, conditions, compensation and performances contained herein, the parties hereto do mutually agree as follows: Section 1.Term. This Agreement be for a period of three (3) fiscal years, which shall commence on July 1, 2016 and shall terminate on June 30, 2019. Section 2.Termination. This Agreement may be terminated at any time by mutual, written consent of the parties or for convenience by either party upon written notice to the other party ninety (90) calendar dayspriorto the termination. Section 3.Effect of Termination. If termination of this Agreement occurs for any reason, including expirationof the Agreement, the City shall not be liable for any compensation to the Chamber for work performed beyond the cancellationdate. Should this Agreementbe terminated, the Chamber will refund to the City, on apro-rated monthly basis 1 – Agreement for Services 53 any portionof the annualfunding amount under Section 4 of this Agreementthat is after the cancellation date. Section 4.City Funding . The City shall provide to the Chamber an amount not to exceed $150,000 of TOT funding under this Agreement as provided herein: A.City will provide the Chamber with $50,000 due in the month of July 2016, 2017 and 2018. B.Should the City’s annual tourism-related TOT revenueexperiencea decrease, the City maintains the right to unilaterally adjust the annual payment to the Chamber as deemed appropriate by theCity Council. Section 5.Responsibilities of Chamber . As circumstances may require, the Chamber’s responsibilities may be modifiedby the City Administrator upon written agreement with the Chamber. In addition to making an annual tourism update to the City Council, the Chamber agrees to the following: A.In Fiscal Year 2016-17, the Chamber will: (1)Partner with the City in developing and completing a comprehensive survey of regional tourism assets, including the creation of survey instruments, methodology and the compilation and submission of data and reports. (2)Develop and implement a visitor/tourist survey designed to ascertain information regarding current tourism opportunities, strengths and challenges.Data from the survey will be compiled and presented in a report to the City. (3)Work with the City to identifypartners,and participants, in the City’sefforts to create and complete a Stakeholder Information Form. (4)Work with the City in the creation of a City led Tourism Task Force, including the identification of stakeholders and potential task force participants. B.In Fiscal Year 2017-18, the Chamber will: (1)Will be a member of the Tourism Task Force. (2)Participate on the Tourism Task Force, helping the task force identify current and future goals and objectives as part of the City’s Tourism Development Plan. 2 – Agreement for Services 54 (3)Assist the Tourism Task Force with implementation of goals and objectives as appropriate. (4)Assist the City with the selection of a marketing consultant to assist the Tourism Task Force with branding and the creation of a Woodburn Marketing Plan. (5)Participate in the branding effort in vetting potential brands and themes to Chamber membership for input and direction. The Chamber will also assist the City in presenting both the branding and Woodburn Marketing Plan to the City Council once completed. C.In Fiscal Year 2018-19, the Chamber will: (1)Consult with City, and assist in the development,of Woodburn marketing material and events calendar. (2)Create a new tourism website with mobile application consistent with the City’s Tourism and Marketing Plan. (3)Develop a Tourism ResourceGuide with the assistance of the City. (4)Assist the City in efforts to create and install tourism related kiosk in the downtown area and at the outlet mall. (5)Assist the City in tourism related grant and grant funded projects. Section 8.Compliance with Federal, State and Local Laws. The Chamber agrees to abide by all applicable federal and state statutes and regulations prohibiting employment discrimination, and any other statutes and regulations pertaining to the subject matter of this Agreement. Section 9.Authority to Execute Agreement. The Chamber represents to the City that this Agreement has been duly authorized by all necessary action on the part of the Chamber and no other corporate or other action on the part of the Chamber is necessary to authorize the execution and delivery of this Agreement. That this Agreement has been duly authorized by the Woodburn City Council andthe City represents to the Chamber thatthe City Administrator has the power and authority to bind the City to this Agreement. Section 10.Legal Relations. Neither the Chamber, nor any employee, officer, official or volunteer of the Chamber shall be deemed to be an independent contractor, employee or volunteer of the City. No liability shall attach to the Chamber or the City by reason of entering into this Agreement except as expressly provided herein. 3 – Agreement for Services 55 Section 11.Indemnification. The Chamber agrees to be responsible for and assumes liability for its own negligent acts or omissions, and those of its officers, agents, officials, employees or volunteers while performing work or expending funds pursuant to this Agreement to the fullest extent provided by law, and agrees to save, indemnify, defend and hold the City harmless from any such liability. This indemnification clause shall apply to any and all causes of action arising out of performance of work or expenditures of funds under this Agreement. The provisions of this section shall survive the expiration or termination of this Agreement with respect to any event occurring priorto expiration or termination. Section 12.Nondiscrimination. The Chamber shall comply with all applicable federal, state, and local laws, rules and regulations on nondiscrimination in employment because of race, color, ancestry, national origin, religion, sex, marital status, age, medical condition, or disability. Section 13.Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of Oregon. Section 14.Severability. If any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 15.Assignment. Neither party shall assign the Agreement without written consent of the other. Section 16. Attorney Fees. In any action brought by either party under this Agreement, the losing party shall pay to the prevailing party a reasonable sum for attorney fees in such action, or arbitration or appeal. Section 17. Entire Agreement. This Agreement constitutes the entire Agreement between the parties and supersedes all prior agreements, written and oral, between the parties. No modification of this Agreement shall be binding unless in writing and signed by both parties. Section 18.Notification. All correspondence and notices related to this Agreement shall be directed as follows: If directed to the City: City of Woodburn 270 Montgomery Street Woodburn, Oregon 97071 Attn: Scott C. Derickson, City Administrator 4 – Agreement for Services 56 If directed to the Chamber: 979 Young Street Suite A PO Box 194 Woodburn, Oregon 97071 Attn: Holli Thomas, Executive Director IN WITNESS WHEREOF, the Chamber and City have, by approval of their respective governing bodies, caused this Agreement to be executed. WOODBURNAREACHAMBER OF COMMERCE Holli Thomas, Executive Director Date CITY OF WOODBURN Scott C. Derickson, City Administrator Date 5 – Agreement for Services 57 Agenda Item February 22, 2016 TO:Honorable Mayor and City Council through City Administrator FROM:Randy Scott, Public Works Director SUBJECT: Award of Construction Contract for the N. 1Street Sanitary Sewer st Rehabilitationproject, BID #2016-03 RECOMMENDATION: That the City Council, acting in its capacity as the LocalContract Review Board, award theconstruction contract for the N. 1Street Sanitary Sewer Rehabilitationproject to st CG Contractors, LLCinthe amount of $139,239.00. BACKGROUND: The subject Capital Improvement Project is identified in the approvedbudgetfor fiscal year2015/16.This project involves therehabilitationof the existingsanitary sewer main in NorthFirst Street from Harrison Streetto the north end of First Street. The failingexisting 6” & 8”diameterverified clay pipesanitary sewer mainwill be rehabilitatedin place by usingboth pipe bursting andcast in placemethods. Bids were publically opened February 11, 2016. Seven (7) responsive bids were received as follows: CG Contractors, LLC$139,239.00 Emery & Sons$171,617.00 Canby Excavation$172,492.00 K & R Plumbing$182,572.00 Gelco Construction$189,894.10 Trench Line Excavating$213,318.00 Jesse Rodriguez Const.$215,022.00 The Engineer's Estimate is: $135,410.20 DISCUSSION: Thisprojectis a continuingeffort by the Public Works Department to preserve and This project willreduce inflow & maintain the Citysanitary sewer infrastructure. infiltration of extraneous water entering the wastewater collection systemsin accordance with best management practices and NPDES permit requirements. Agenda Item Review:City Administrator ___x___City Attorney ___x___Finance __x___ 58 Honorable Mayor and City Council February22, 2016 Page 2 The contract award is in conformance with public contracting laws of the State of Oregon as outlined in ORS Chapter 279C and the lawsandregulations of the City of Woodburn, therefore, staff is recommending the contract be awarded. FINANCIAL IMPACT: The subject project is identified in the adoptedfiscal year 2015/16 Budget and funded by the Sewer Capital Construction Fund, 465. Project accounting code CDSW1466. 59 Agenda Item February 22, 2016 TO:Honorable Mayor and City Council FROM:Scott C. Derickson, City Administrator SUBJECT: Appointment of Administrator Pro Tem RECOMMENDATION: I t is recommended the City Council appoint Assistant City Administrator Jim Row as Administrator Pro Tem for the period March 16 through March 26, 2016. BACKGROUND: I will be away from the office from March 16 through March 26, 2016. Pursuant to Section 21(e) of the Woodburn Charter, the City Council shall appoint an Administrator Pro Temwhenever the Administrator is absent from the City. The Pro Tem Administrator shall possess the powers and duties of the Administrator, as limited by the Charter.Jim Rowhas accepted this assignment in the past and has the skills needed to successfullycomplete it. FINANCIAL IMPACT: There is no financial impact associated with the recommended action. Agenda Item Review:City Administrator ___x___City Attorney __x____Finance _x____ 60