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1989-03-28 Special MeetingKodiak Island Borough SERVICE DISTRICT NO. 1 BOARD OF SUPERVISORS Special Meeting - FY 190 Budget Hearing March 28, 1989 MINUTES 1. CALL TO ORDER AND ROLL CALL The meeting was called to order at 7:52 p.m. in Borough Assembly Chambers by Mr. Jim Fisk, Chairman. Members Present Jim Fisk, Chairman Tony Perez, Vice -Chairman Scott Arndt James Berg Okey Chandler Earl Smith Members Absent - None. Staff Present Dave Crowe, Borough Engineer Ann Moen, Secretary A quorum of the Board was determined to be present. Audience members present were Service District No. 1 residents Andy Nault of 3522 Gull Drive, Dan Millard of 366 Lilly Drive, and Daniel W. Moen of 584 Lilly Drive. Mr. Fisk explained that the purpose of this meeting is two -fold: (1) the adoption of the Service District's Work Program for FY 190, and (2) the adoption of the Budgets for the Road Service District fund, Water fund, and Sewer fund for FY 190, in accordance with KIB Code Sections 4.20.030 and 4.20.040: 4.20.030 Authority and duties of boards. A. On or before March 31st of each year, each board shall adopt a service area work program for the next borough fiscal year. The work program shall be a detailed statement of the level of services desired by the service area, and the service area's priorities for operating and capital expenditures. B. Concurrently with the adoption of the service area work program, each board shall adopt a service area operating budget and capital budget for the next borough fiscal year. The budgets shall be consistent with the service area work program and shall be in a form compatible with the borough operating budget and capital budget, respectively. The service area budgets shall be incorpor- ated in the borough budget for submission to the assembly. C. A board shall participate in the administration of services in its service area in accordance with procedures adopted under Section 4.20.020D and shall advise the mayor and assembly regarding the execution of the work program and budgets for its service area. -1- r r KODIAK ISLAND BOROUGH Service District No. 1 Board of Supervisors March 28, 1989 Special Meeting - FY 190 Budget Hearing 4.20.040 Public Hearing. Each board shall hold at least one public hearing within its service area before adopting the service area work program, operating budget and capital budget. Notice of the public hearing shall be published at least once a week for two consecutive weeks before the public hearing in a newspaper of general circulation in the service area. Copies of the proposed service area work program, operating budget, and capital budget shall be available to the public at the borough clerk's office and at such other places as the board may designate, at lease seven days before the public hearing. Mr. Crowe noted that the budget work sheets need adjustments to reflect the requirements of the Department of Labor regarding the division of work involved in force account contracts (maintenance vs. repair/construction), and correction of errors in line items and the total shown for Water Operations and Maintenance (051-162). 2. SERVICE AREA WORK PROGRAM Mr. Arndt moved, and Mr. Berg seconded the motion, that the Board adopt the Service District No. 1 FY'90 Work Program as presented for water, sewer, and road maintenance. Mr. Arndt then moved, and Mr. Berg seconded the motion, to amend the work program as follows: Page 1 - Water: Delete "Clean healthy water with adequate pressure" and, from the last two lines on the page, "and chlorination" (since the Service District has no control over these items); Page 2 - Sewer: Delete "replace system" under "Long range sewer goals." Following a brief discussion during which Mr. Smith disagreed with the proposed deletions on the basis that the Service District does have the ability to flush the system, and that there are and will continue to be portions of the sewer system that need replacing, the vote was taken on the amendment. The motion to amend the Work Program passed on a 5-1 roll call vote, Mr. Smith voting "nay." The Chairman closed the regular (special) meeting and opened the Public Hearing. ANDY NAULT of 3522 Gull Drive asked the Board if adoption of a work program was done each year ("yes") and asked if the deletion of the "Clean healthy water" provision is something new. The Board replied that it had never seen this provision before. DAN MILLARD of 366 Lilly Drive asked the Board to review the individual items shown on the Work Program and deal with the ambiguities, vagueness, and the lack of criteria for maintenance and the lack of a detailed statement of the level of services desired by the Service District and lack of priorities for operating and capital expenditures. When do you remove snow and ice for safety? What is the acceptable minimum number and depth of potholes? What about "Storm drains, paving, lights, sidewalks, curbs and gutters"? He hasn't seen much effort toward a "Ditch maintenance policy" or keeping all ditches flowing freely, and suggested -2- A r KODIAK ISLAND BOROUGH Service District No. 1 Board of Supervisors March 28, 1989 Special Meeting - FY 190 Budget Hearing the Board work toward the adoption of a drainage plan. When and how do you want to "Exercise water valves for longer life"? What constitutes "keep good records on all equipment installations"? Under "Water - Long Range Goals," what does "expand system" mean? He sees a real problem with driveway cleaning during snow removal (Mr. Fisk replies that driveway clean-up has cost almost what the removal of snow and ice has cost). Mr. Millard believes that the Board must be specific regarding each of the Work Program items. ANN MOEN of 584 Lilly Drive stated her agreement with Mr. Millard's concerns, and described the entire Work Program as so vague as to be nearly worthless. The only definitive portions of the Work Program are the statements, "Fire hydrants will be in good working order at all times" and "Keep all ditches flowing freely." She said that, in addition to her opinions as a resident of the Service District, she has seen first hand the frustrations of Borough staff people who have consistently asked for, and have never received, clear direction from the Board regarding operating policies and procedures. ANDY NAULT asked the Board exactly how much snow has to be in front of his house before roads are plowed, and suggested merely putting a cover page on the Work Program saying "Everything will be done as needed," to save time. He believes the Board needs to prioritize the items, and commented that his taxes are being tripled while services are being decreased. He agreed with Mrs. Moen's comments. To the concerns of those appearing, Chairman Fisk and various Board members replied: The Chairman makes the determination when the snow removal contractor shall be called out, stating that when it snows two inches on Selief Lane, he'd better get the contractor out because suddenly that two inches has become seven inches. It's sort of on a "look", "see", and "do" basis. Sanding is included under snow and ice removal. Mr. Fisk stated that the Board members had previously adopted a policy on criteria; he said he doesn't call out the contractor on the basis of one complaint from a customer that a pothole exists; that when he sees a sign down, for example, he either re -sets it himself or asks the crew to do it. The Chairman closed the Public Hearing and reopened the regular (special) meeting. The motion to pass the Work Program as amended passed 5-1 on a roll call vote, with Mr. Smith voting "nay." FY 90 BUDGETS A. WATER FUND REVENUES AND EXPENDITURES Mr. Arndt moved, and Mr. Berg seconded the motion, to adopt the Water Fund Revenues and Expenditures Budgets. Mr. Arndt moved, and Mr. Berg seconded the motion, to amend line items 051-162-561-10-12 from $2,000 to $20,000 and 051-162-561-37-51 from $0 to $100, for total budgeted expenditures of $206,000. The motion to amend passed unanimously on a -3- ( KODIAK ISLAND BOROUGH Service District No. 1 Board of Supervisors March 28, 1989 Special Meeting - FY '90 Budget Hearing roll call vote. The Chairman closed the regular (special) meeting and opened the Public Hearing. DAN MILLARD asked for an explanation of line item 561-37-89, Depreciation. Mr. Crowe replied that Karl Short of the Finance Department should explain. DAN MOEN of 584 Lilly Drive inquired about Interest revenues, and when Mr. Arndt stated there is about $600,000 capital monies invested, Mr. Moen suggested Interest revenues shown on the budget work sheets do not indicate a good return. The Chairman closed the Public Hearing and reopened the regular (special) meeting. Mr. Arndt commented that, with different ongoing projects, when people have requested additional hook-ups, additional Accounts Receivable result. Mr. Crowe explained that it's a cash flow situation — this budget print-out doesn't show Reserves for Depreciation or other asset accounts. The motion to adopt the Water Fund Revenues and Expenditures budgets as amended passed by unanimous roll call vote. A short discussion ensued between Mr. Arndt and Mr. Crowe about the 561-41-53 Repairs and Maintenance item, and the Department of Labor's requirement that any repair or replacement items under force account contracts need to be paid for under the "Little Davis -Bacon" act. Mr. Crowe suggested that this line item be split out 2/3 for Repairs and 1/3 for Maintenance. B. SEWER FUND REVENUES AND EXPENDITURES Mr. Arndt moved, and Mr. Perez seconded the motion, to adopt the Sewer Fund Revenues and Expenditures Budgets. ANDY NAULT noted that no Interest Revenue is shown. DAN MOEN inquired about the difference in Depreciation amounts over the years. Mr. Crowe replied that the Borough Auditors set these amounts based on established guidelines, but that the Board should hear from a representative from the Finance Department to explain these items. Mr. Arndt commented that Water and Sewer are enterprise funds which "can't" lose money. Any balances in the fund budgets at the end of the year go back into these funds, and not into the General Fund. The Chairman closed the Public Hearing and reopened the regular (special) meeting. The motion to adopt the Sewer Fund Revenues and Expenditures budgets passed by unanimous roll call vote. S0 r r KODIAK ISLAND BOROUGH /- Service District No. 1 Board of Supervisors /C March 28, 1989 Special Meeting - FY'90 Budget Hearing C. ROAD SERVICE DISTRICT NO. 1 REVENUES AND EXPENDITURES Mr. Berg moved, and Mr. Perez seconded the motion, to adopt the Road Fund Revenues and Expenditures Budgets as presented, and establish 0.75 mils of taxes for roads. The Chairman closed the regular (special) meeting and opened the Public Hearing. ANDY NAULT asked why the mil rate is going up from 1/4 to 3/4 mils. Mr. Crowe replied that in former years the Service District received state revenue sharing funds for road maintenance as well as regular state and federal revenue sharing funds, which permitted a build-up of a fund balance. For the past three years the Service District has not been receiving state revenue sharing funds for road maintenance and there is no longer a fund balance; last year was the last year there was a fund balance. ANDY NAULT asked why $8,000 was shown under "Repairs" with nothing shown under "Maintenance." Mr. Crowe explained that if under Department of Labor regulations a repair is subject to the "Little Davis -Bacon" act, having the entire amount under this line item would cover those expenses. In reply to other questions by Mr. Nault, Mr. Crowe explained that office expenses, including pro-rata office rent, which could be identified on the basis of actual time spent or supplies used, are charged to the Service District budgets and credited to the Engineering Department budget. The motion to adopt the Road Fund Revenues and Expenditures Budgets as presented, and to establish an 0.75-mil rate of taxes for roads, passed by unanimous roll call vote. 4. AUDIENCE COMMENTS DAN MILLARD stated his wish to impress on the Board the need for Operating Procedures. As a resident, customer, and voter, he feels the Board isn't serious about implementing a workable work program or procedures. 5. STAFF COMMENTS DAVE CROWE, Borough Engineer, stated his agreement with Mr. Millard's and Mrs. Moen's comments. Borough staff needs direction from the Board on its established firm policies, its priorities, and the level of services to be provided by staff on Service District matters. Staff is asking for clear direction from the Board, which is going to require the adoption of clear guidelines, priorities, and a clear and specific work program. Chairman Fisk stated his agreement with Mr. Crowe. Mr. Millard brought proposed guidelines and policies to the Board, which the Board largely ignored, and information from Fairbanks about their Service District Boards. Mr. Millard also suggested code changes, and Mr. Fisk appointed a committee to work on the -5- r r KODIAK ISLAND BOROUGH /^ Service District No. 1Board of Supervisors E March 28, 1989 Special Meeting - FY'90 Budget Hearing proposed code changes, but the committee hasn't yet met or come back to the Board with any recommendations. The Board must have a work session, or several, to develop policies and guidelines for Service District operation. 6. ADJOURNMENT Without objection, the meeting was declared adjourned by Chairman Fisk at 10:20 p.m. -6-