April 11, 2016 Agenda
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ATHRYN IGLEYAYOR
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ERESA LONSO EONOUNCILOR ARD
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OBERT ARNEYOUNCILOR ARD
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HARON CHAUBOUNCILOR ARD
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ITY ALL OUNCIL HAMBERS ONTGOMERY TREET
1.CALL TO ORDER AND FLAG SALUTE
2.ROLL CALL
3.ANNOUNCEMENTS AND APPOINTMENTS
Announcements:
A.
The City's Budget Meetingwill be held at 9:00 a.m. on Saturday, May 7,
2016 at Woodburn City Hall.
Appointments:
None.
4.COMMUNITY/GOVERNMENT ORGANIZATIONS
None.
5.PROCLAMATIONS/PRESENTATIONS
Proclamations:
None.
Presentations:
None.
6.COMMUNICATIONS
.
None
–
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.
This facility is ADA accessible. If you need specialaccommodation, 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.**
April 11, 2016Council Agenda Page i
A.Woodburn City Council minutes of March 28, 20161
Recommended Action: Approve the minutes.
9.TABLED BUSINESS
None.
10.PUBLIC HEARINGS
None.
–Members of the public wishing to comment 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.3000–An Ordinance Amending Ordinance 2114 (the 5
Portland General Electric Privilege Tax Ordinance) and Ordinance
2145 (the Northwest Natural Gas Privilege Tax Ordinance) to Allow
Privilege Tax Proceeds to be Used for Street Maintenance and Street
Lighting Purposes
Recommended Action:Adopt Ordinance 2532 (Exhibit A), amending
Ordinance 2114 (Exhibit B) and Ordinance 2145 (Exhibit C) to allow the
privilege tax proceeds to be used for street maintenance and street
lighting purposes.
B.Council Bill No. 3001–A Resolution Adopting an Amendment to the 42
ICMA Retirement Corporation Qualified Retirement Plan
Recommended Action:Adopt the resolution to amend the ICMA
Retirement Corporation Governmental Money Purchase Plan and Trust
in order to ensure the plan is updated and in accordance with current
IRS regulations.
–
These are
12.PLANNING COMMISSION OR ADMINISTRATIVELAND USE ACTIONS
Planning Commission or Administrative Land Use actions that may be called up
by the City Council.
A.Planning Commission Approval of a Preliminary Subdivision, SUB 45
2015-02, Located at 1225 Brown Street
Recommended Action:No action is recommended. This item is
placed before the Council for informational purposes, in compliance
with the Woodburn Development Ordinance Section 4.02.02. The
Council may call up this item for review if desired.
13.CITY ADMINISTRATOR’S REPORT
April 11, 2016Council Agenda Page ii
14.MAYOR AND COUNCIL REPORTS
15.ADJOURNMENT
April 11, 2016Council Agenda Page iii
COUNCIL MEETING MINUTES
MARCH 28, 2016
DATECOUNCIL CHAMBERS, CITY HALL, CITY OF WOODBURN, COUNTY OF
MARION, STATE OF OREGON, MARCH 28, 2016
CONVENED
The meeting convened at 7:02 p.m. with Mayor Figley presiding.
ROLL CALL
Mayor Figley Present
Councilor Carney Absent
Councilor Lonergan Present
Councilor Schaub Present
Councilor Morris Absent
Councilor Ellsworth Present
Councilor Alonso Leon Present
Staff Present:
City Attorney Shields, Assistant City Administrator Row, Police Chief Ferraris,
Public Works Director Scott, Economicand DevelopmentServicesDirector Hendryx, Human
Resources Director Hereford,Finance Director Head, Economic Development Director Johnk,
Library Manager Hunter, Recreation Services Manager Wierenga, Community Relations Manager
Gutierrez-Gomez, Communications Coordinator Horton, City Recorder Pierson
ANNOUNCEMENT
0:00
The filing period for Mayor and Council positions will open June 1, 2016. Positions to be voted
upon at the November 8, 2016 general election are as follows:
Mayor: At-Large position (2-year term)
Councilor -Ward I: Precinct 815 (4-year term)
Councilor -Ward II: Precinct 825 (4-year term)
Councilor -Ward VI: Precinct 865 (4-year term)
Candidate filing forms and instructions are available from the City Recorder and will be posted on
the City website.
COMMUNITY/GOVERNMENT ORGANIZATIONS
0:01
Mayor Figley recognized Nancy Kirksey for her contributions to the community and announced
the dedication of the Mayor Nancy Kirksey Atriumwhichis located in the library.
PROCLAMATIONS/PRESENTATIONS
0:06
A.Arbor Week
B. Mayors Day of Recognition for National Service
C. Child Abuse Prevention
COMMUNICATIONS
0:13
Mayor Figley read a letter from the Rogers Family that stated they are new to Woodburn and they
love the improvements to the City. Their son added in the letter that he likes the lights on the
overpass and wonders if there are other colors.
1
COUNCIL MEETING MINUTES
MARCH 28, 2016
BUSINESS FROM THE PUBLIC
0:14
Arnold Ponce, 3244 McNaught St, wanted the Council to be aware of a violation of Ordinance
2225in front of WinCo Foods. He stated that he has tried to get this issue resolved through code
enforcement, public works and has also contacted the Councilor for his ward. He added that he
has not been able to get any enforcement on this ordinance or any answers to this issue. Mayor
Figley thanked Mr. Ponce for coming this evening. Assistant City Administrator Row let Mr.
Ponce know that he will look into this situation and report back to him. Councilor Alonso Leon
stated that she is his representative and would be happy to speak with him after the meeting.
CONSENT AGENDA
0:22
A.Woodburn City Council minutes of February 22, 2016,
B.Woodburn City Council minutes of March 21, 2016,
C.Woodburn City Council Executive Session minutes of March 21, 2016,
D.Woodburn Recreation and Park Board minutes of March 8, 2016,
E.Building Activity for February 2016,
F.Crime Statistics through February 2016.
Schaub/Ellsworth
... adopt the Consent Agenda. The motion passed unanimously.
COUNCIL BILL NO. 2998 –ARESOLUTION PROVIDING A WAIVER TO THE
0:23
WOODBURN NOISE ORDINANCE NO. 2312 FOR CONSTRUCTION ACTIVITY
ASSOCIATED WITH THE OREGON DEPARTMENT OF TRANSPORTATION’S
PACIFIC HIGHWAY 99E/YOUNG STREET INTERSECTION AND ADA RAMPS
IMPROVEMENT PROJECT
Lonergan
introduced Council Bill No. 2998. Recorder Pierson read the billby title only since
there were no objections from the Council. On roll call vote for final passage, the bill passed
unanimously. Mayor Figley declared Council Bill No. 2998 duly passed.
COUNCIL BILL NO. 2999 - A RESOLUTION AUTHORIZING APPLICATION FOR A
0:25
LOCAL GOVERNMENT GRANT FROM THE OREGON PARKS AND RECREATION
DEPARTMENT FOR THE INSTALLATION OF A SPLASH PAD AT CENTENNIAL
PARK
Lonergan
introduced Council Bill No. 2999. Recorder Pierson read the bill by title only since
there were no objections from the Council. On roll call vote for final passage, the bill passed
unanimously. Mayor Figley declared Council Bill No. 2999 duly passed.
INTERGOVERNMENTAL AGREEMENT WITH THE CITY OFDALLAS
0:27
Lonergan/Alonso Leon
...authorize the City Administrator to sign an Intergovernmental
Agreement (IGA) with the City of Dallas for Structural/Mechanical Plan Reviews.The motion
passed unanimously.
INTERGOVERNMENTAL AGREEMENT WITH MARION COUNTY
0:29
Lonergan/Schaub
...Authorize the City Administrator to sign the enclosed Intergovernmental
Agreement (IGA) with Marion County. The motion passed unanimously.
2
COUNCIL MEETING MINUTES
MARCH 28, 2016
WOODBURN DOWNTOWN ASSOCIATION MEMORANDUM OF UNDERSTANDING
0:30
Assistant City Administrator Row provided a staff report.Aldo Rodriguez, Woodburn Downtown
AssociationManager, provided an overview of the Woodburn Downtown Association and
provided details of the partnership that is envisioned between the Woodburn Downtown
Associationand the City. Community Relations Manager Gutierrez-Gomez provided abrief
update on his outreach efforts. Councilor Lonergan stated that he is in support of this and asked
that Aldo comeback and give Council feedback on a regular basis. Councilor Alonso Leon stated
that she would likeCommunity Relations Manager Gutierrez-Gomez to provide the Council with
Lonergan/Alonso Leon
his visions and goals in regards to community outreach. ...authorize the
City Administrator to enter into the enclosed Memorandum of Understanding (MOU) with the
Woodburn Downtown Association to facilitate achievement of the goals identified in the included
RARE Application and associated Work plan. The motion passed unanimously.
ACCEPTANCE OF A PUBLIC UTILITY EASEMENT WITHIN THE DEVELOPMENT
0:51
AT 105 ARNEY ROAD, WOODBURN, OR 97071 (TAX LOT 052W12BC06600)
Lonergan/Ellsworth
... accept the 5 feet wide Public Utility Easement for public utilities granted
by Master Development LLC, property owner of 105 Arney Road, Woodburn OR 97071 (Tax Lot
052W12BC06600).The motion passed unanimously.
ACCEPTANCE OF A WARRANTY DEED ALONG THE WESTERLY PORTION OF
THE DEVELOPMENT AT 105 ARNEY ROAD, WOODBURN, OR 97071 (TAX LOT
052W12BC06600)
Lonergan/Ellsworth
...accept the variable width Right-of-Way Dedication granted by Master
Development LLC, property owner of 105 Arney Road, Woodburn OR 97071 (Tax Lot
052W12BC06600).The motion passed unanimously.
ACCEPTANCE OF A WARRANTY DEED ALONG THE WESTERLY PORTION OF
0:52
THE DEVELOPMENT AT 105 ARNEY ROAD, WOODBURN, OR 97071 (TAX LOT
052W12BC06600)
Schaub/Ellsworth
... accept the variable width Right-of-Way Dedication granted by Master
Development LLC, property owner of 105 Arney Road, Woodburn OR 97071 (Tax Lot
052W12BC06600).
The motion passed unanimously.
CITY ADMINISTRATOR’S REPORT
AssistantCity Administrator Row reported that City Administrator Derickson will be back at work
tomorrow. He also announced that the first Arbor Day program will take place on Saturday from
10:00 a.m.-1:00 p.m. at Settlemier Park.
MAYOR AND COUNCIL REPORT
0:56
Councilor Lonergan stated that he received an email from a resident along Boones Ferry thanking
the Council for working with Marion County on eliminating truck trafficon Boones Ferry.
Councilor Lonergan asked Chief Ferraris how someone would be cited on Boones Ferry. Chief
Ferraris stated that he is not sure but will find out and let him know.
Councilor Ellsworth announced that the Tulip Festival is going on and that the Woodburn Kiwanis
are having their annual bark dust sale.
3
COUNCIL MEETING MINUTES
MARCH 28, 2016
Councilor Schaubstated that the Woodburn clean-up was a great morning and that the students
that were with her did a fantastic job.
WORKSHOP
0:57
Mayor Figley opened the workshop at 8:00 p.m. to discuss the Economic Development and
Targeted Industry Analysis.Economic Development Director Johnkprovided an overview of what
economic development is and the role of the City Council. Economic and Development Services
Director Hendryxprovided an overview of the purpose of the targeted industry analysis. Beth
Goodman from EcoNorthwest provided the scope of work for the targeted industry analysis.
Council members provided comments and direction regarding the targeted industry analysisand
what they would like to see in regards to uses.Ms. Goodman summarized that what she feels she
is hearing from the Council is that they are interested in looking at a variety of businesses and a
variety of industries, not necessarily just larger businesses. Mayor Figley thanked staff for their
presentation and closed the workshop at 8:49 p.m.
ADJOURNMENT
Ellsworth/Alonso Leon
... meeting be adjourned. The motion passed unanimously.
The meeting adjourned at 8:49 p.m.
APPROVED ___________________________
KATHRYN FIGLEY, MAYOR
ATTEST_________________________
Heather Pierson, City Recorder
City of Woodburn, Oregon
4
Agenda Item
April 11, 2016
TO:Honorable Mayor and City Councilthrough the City Administrator
FROM:Scott C.Derickson, City Administratorand Sarah Head, Finance
Director
SUBJECT:
Ordinance Amendments to Allow use of Privilege Tax for Street
Lighting
:
RECOMMENDATION
Adopt Ordinance 2532 (Exhibit A), amending Ordinance 2114(Exhibit B)and
Ordinance 2145 (Exhibit C) to allow the privilege tax proceeds to be used for
street maintenance and street lighting purposes.
BACKGROUND:
Part of the Finance Department’s mid-year corrective action strategy involves the
City Council modifying Ordinance 2114 (the Portland General Electric Privilege
Tax) and Ordinance 2145 (the Northwest Natural Gas Privilege Tax), which
dedicate privilege tax revenues specifically for “transportation improvements,” to
also provide for “street maintenance and street lighting services.”The ordinance
changes are consistent withOregon state lawbecause the applicable statute
allows the City Council to expand the use of these tax proceeds.
Woodburn’s FY 2016-17 street lighting costs are expected to be $240,000. If
approved by the City Council, not only will the current year General Fund street
lighting allocation of $130,000 be retained in the General Fund this year, but also
in upcoming fiscal years.These savings will further address projected shortfalls and
help supportGeneral Fund services and programs.
:
DISCUSSION
Historically, General Fund discretionary resources have paid approximately half
of the annual costs associated with street lighting, with the Street Fund picking up
approximately $110,000. We believe that allocating the full costs of street lighting
to theStreet Fund isappropriate, andconsistent with the City Council’s
FY 2016-
17 Financial Plan: Budget Policies, Fiscal Strategy and Five-Year Forecast.
Agenda Item Review:City Administrator ___x___City Attorney ___x___Finance __x___
5
Honorable Mayor and City Council
April 11, 2016
Page 2
As has been the case in past years, expected shortfalls in both the current year
and upcoming years arebeing forecasted. Councilors will also recall recent
Council discussions about the need for the City to develop a plan to address
anticipated increases in operating expenses, specifically as they relateto
insurance and PERS costs. As the City Council hasalready been briefed, the City
has undertaken a series of mid-year corrective actions intended to bring revenues
more in line with costs, while continuing to protect the City’s cash position, ending
fund balances and City Council priority goals, such as economic development
and community outreach.
Per the most recent General Fund forecasts, the Finance Department is now
projecting a current year General Fund shortfall (revenues over expenses, not
including contingency) of approximately $409,000, which then grows to $695,000
in FY 2016-17 if steps are not taken to bring expenses more in line with costs.
Councilors should note that a shortfall was anticipated as part of last year’s
budget process per the use of beginning fund balance to supplement revenues.
It’s important for Councilors to know that the City is still operating well within the
. The City hasbeen working with projectedbudgeted
Adopted FY 2015-16 Budget
shortfalls for many years now. By allowing the full costs of street lighting to be
allocated within the Street Fund, the General Fund will save $130,000 annually.
Additionally, the Street Fund’s financial position, with an estimated $320,000 in
annual Privilege Tax revenue and estimated $1,211,297 contingency reserve can
support the additional $130,000 in street lighting costs.
For the Council’s review, I have attached a copy of the current
FY 2016-17
(Exhibit D)
Financial Plan: Budget Policies, Fiscal Strategy and Five-Year Forecast
(Exhibit E)
. Section 1. Annual Review & Policy, Section 2. Discretionary &
specifically provide
Dedicated Resources and Section 3. General Fund Budget
the policy support for allocating the full cost of Street Lighting to the Street Fund
and Street Fund revenues.
:
FINANCIAL IMPACT
Adopting Ordinance2532 will generate $130,000In current year General Fund
saving, allocating the full cost of street lighting expenses to the Street Fund and
Street Fund revenue sources. These General Fund savingswill occur thisFY and be
reflected in the City’s Five-Year General Fund forecast, helping to address
revenue shortfalls and supporting critical General Fund services and programs.
6
Exhibit A
COUNCIL BILL NO. 3000
ORDINANCE NO. 2532
AN ORDINANCE AMENDING ORDINANCE 2114 (THE PORTLAND GENERAL
ELECTRIC PRIVILEGE TAX ORDINANCE) AND ORDINANCE 2145 (THE NORTHWEST
NATURAL GAS PRIVILEGE TAX ORDINANCE) TO ALLOW PRIVILEGE TAX PROCEEDS
TO BE USED FOR STREET MAINTENANCE AND STREET LIGHTING PURPOSES
in 1993, Ordinance 2114 imposed a privilege tax in the amount
WHEREAS,
of one and one-half percent (1.5%) on the gross revenues of the Portland
General Electric Company pursuant to Oregon state law; and
in 1995, Ordinance 2145 imposed a privilege tax in the amount
WHEREAS,
of two percent (2%)on the gross revenues of the Northwest Natural Gas
Company pursuant to Oregon state law; and
both Ordinance 2114 and 2145 specify that privilege tax
WHEREAS,
proceeds be dedicated to the funding of transportation improvement projects
identified in the City’s Capital Improvement Plan; and
Section 3 (B). General Fund Budget of the City Council’s FY
WHEREAS,
2016-17 Financial Plan states: “The highest priority shall be to conserve General
Fund discretionary resources and fund high priority programs as defined by the
City Council and City Administrator;” and
historically, the City’s General Fund has contributed $130,000
WHEREAS,
annuallyin discretionary resources to offset the Street Fund’s annual street
lighting costs, a financial contribution the GeneralFund is struggling to pay in
light of projected shortfalls (revenue over expenses)and other program
reductions; and
the City Council can allow the use of Privilege Tax revenues to
WHEREAS,
pay for the full costs of street lighting services, thus saving the General Fund
$130,0000 annually (current year) to be used for addressing current and
projected General Fund shortfalls and supporting critical General Fund services
and programs;
NOW, THEREFORE,
THE CITY OF WOODBURN ORDAINS AS FOLLOWS:
Section 4 of Ordinance 2114 is amended to read as follows:
Section 1.
Council Bill No. 3000
Page- 1 -
Ordinance No. 2532
7
Exhibit A
Section 4. The proceeds derived from this ordinance
Use of Proceeds.
shall be dedicated to funding of transportation improvement projects
identified in the Woodburn Capital Improvement Program, street
maintenance and street lighting.
Section 4 of Ordinance 2145 is amended to read as follows:
Section 2.
Section 4. The proceeds derived from this ordinance
Use of Proceeds.
shall be dedicated to funding of transportation improvement projects
identified in the Woodburn Capital Improvement Program, street
maintenance and street lighting.
Approved as to form:
City Attorney Date
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
City of Woodburn, Oregon
Council Bill No. 3000
Page- 2 -
Ordinance No. 2532
8
Exhibit B
9
Exhibit B
10
Exhibit C
11
Exhibit C
12
Exhibit D
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
13
Exhibit D
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
14
Exhibit D
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
15
Exhibit D
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
16
Exhibit D
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
17
Exhibit D
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
18
Exhibit D
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
19
Exhibit D
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
20
Exhibit D
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
21
Exhibit D
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
22
Exhibit E
Five-Year Forecast
Fiscal Years 2017- 2021
Finance Department
February 16, 2016
23
Exhibit E
(Page Intentionally Left Blank)
24
Exhibit E
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
25
Exhibit E
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
26
Exhibit E
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
27
Exhibit E
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
28
Exhibit E
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
29
Exhibit E
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
30
Exhibit E
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
31
Exhibit E
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
32
Exhibit E
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
33
Exhibit E
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
34
Exhibit E
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
35
Exhibit E
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
36
Exhibit E
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
37
Exhibit E
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
38
Exhibit E
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
39
Exhibit E
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
40
Exhibit E
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
41
Agenda Item
April 11, 2016
TO:Honorable Mayor and City Councilthrough the City Administrator
FROM:Michael Hereford, Human Resources Director
SUBJECT:
ICMA Plan Amendment to Comply with IRS Requirements
:
RECOMMENDATION
Adopt the resolution to amend the ICMARetirement Corporation Governmental
Money Purchase Plan and Trust in order to ensure the plan is updated and in
accordance with current IRS regulations.
:
BACKGROUND AND DISCUSSION
The City has in place a 401(a) plan that is administered by ICMA Retirement
Corporation (ICMA-RC). Recently, ICMA informed their clients that the Internal
Revenue Service (IRS) reviewed and approved their latest 401 plan document.
The new plan document incorporated amendments for legislative and regulatory
changes that are legally required to conform to IRS rules. The attached resolution
will bring the City into compliance.
:
FINANCIAL IMPACT
None.
Agenda Item Review:City Administrator ___x___City Attorney ___x___Finance ___x__
42
COUNCIL BILL NO. 3001
RESOLUTION NO. 2076
A RESOLUTION ADOPTING AN AMENDMENT TO THE ICMA RETIREMENT
CORPORATION QUALIFIED RETIREMENT PLAN
the City of Woodburn, Oregon is “the Employer” and maintains
WHEREAS,
ICMA-RC Plan Number 10; and
the Employer has employees rendering valuable services; and
WHEREAS,
the Employer has established a Qualified Retirement Plan for
WHEREAS,
such employees that serves the interest of the Employer by enabling it to
provide reasonable retirement security for its employees, by providing increased
flexibility in its personnel management system, and by assisting in the attraction
and retention of competent personnel;and
the Employer has determined that the continuance of the
WHEREAS,
Qualified Retirement Plan will serve these objectives;
NOW, THEREFORE,
THE CITY OF WOODBURN RESOLVES AS FOLLOWS:
.That the Employer hereby amends and restates the Qualified
Section 1
Retirement Plan ("the Plan") in the form of the ICMA Retirement Corporation
Governmental Money Purchase Plan and Trust.
.That the assets of the Plan shall be held in trust, with the
Section 2
Employer serving as trustee (“Trustee”), for the exclusive benefit of the Plan
participants and their beneficiaries, and the assets shall not be diverted to any
other purpose. The Trustee’s beneficial ownership of the Plan assets held in
VantageTrust shall be held for the further exclusive benefit of the Plan
participants and their beneficiaries.
That the Employer hereby agrees toserve as Trustee under the
Section 3.
Plan.
Approved as to form:
City AttorneyDate
Page 1 –Council Bill No. 3001
Resolution No. 2076
43
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. 3001
Resolution No. 2076
44
AgendaItem
April 11, 2016
TO:Honorable Mayor and City Council throughtheCity Administrator
FROM:Jim Hendryx, Economic and Development Services Director;
Kate Foster, Associate Planner
SUBJECT:
Planning Commission Approval of a Preliminary Subdivision, SUB 2015-
02, Located at 1225 Brown Street
:
RECOMMENDATION
No action is recommended. This item is placed before the Council for
informational purposes, in compliance with the Woodburn Development
Ordinance Section 4.02.02. The Council may call up this item for review if desired.
BACKGROUND:
The applicant requests a five lot subdivision for four single-family home lots and
one duplex lot, without any variances. The Planning Commissionapproved the
decision onMarch 10, 2016subject to conditions of approval.
FINANCIAL IMPACT:
This decision is anticipated to have no direct public sector financial impact.
Increased development may slightly increase City revenues.
Agenda Item Review:City Administrator ___x___City Attorney ___x___Finance ___x__
45
Honorable Mayor and City Council
April 11, 2016
Page 2
ZONING MAP SHOWING THE SUBJECT PROPERTY
46
Honorable Mayor and City Council
April 11, 2016
Page 3
PRELIMINARY SUBDIVISION PLAN (REDUCED SIZE)
47