BAKER CITY COUNCIL

Special Session
January 18, 2011

#1) Call to Order The meeting was called to order at 6:00 p.m. by Mayor
Dennis Dorrah in Baker City Hall Council Chambers.

#2) Roll Call Roll call was answered by Mayor Dennis Dorrah, and
Councilors Sam Bass, Aletha Bonebrake, Roger Coles,
Beverly Calder, Milo Pope and Clair Button. Also present
were members of the Budget Board: Randy Daugherty, Peter
Ellingson and Nelson Clarke. Absent were Reid Langrill,
Debra Bainter, and Alan Blair. Also present were City
Manager Mike Kee, Finance Director Jeanie Dexter and City
Recorder Becky Fitzpatrick.

#3) Approval of Minutes Next, in a discussion regarding the minutes of the four
budget meetings in 2010, Mayor Dorrah indicated that he
preferred approving the minutes at the first official budget
meeting. He suggested discussing any changes that the
group recommended at this time.

Ms. Bonebrake indicated that there were some

typographical errors that needed to be corrected.

Mr. Daugherty commented that he had a small list of

corrections and clarifications he would like to be made to the
minutes. He added that he would give the written list to Ms.
Fitzpatrick after the meeting.

The group then agreed to approve the minutes, with

changes, at the first budget meeting.

#4) Welcomel Mr. Kee welcomed the group and explained that there
Parameters for was a specific set of rules that dictate what could be
Discussion
discussed at this meeting. He noted that philosophies and
services could be discussed, but not specific appropriations,
continuation of funding for certain services or potential levy.
Mr. Kee explained that there would be period near the end of
meeting to discuss where the group wants staff to put
emphasis.

#5) Presentation by Next, Bob Seymour from Guyer and Associates,

Auditor 09/10 Fiscal explained that his company did the City's audits. He
Year
indicated that the audit was in the final stages and would be
complete by Friday, January 21.
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 Mr. Seymour commented that he would review some
points then would be available to answer questions.

First of all, Mr. Seymour continued, the purpose of the

audit was to verify that financial statements were correct. He
added that the audit shows that the City had reached
minimum standards, such as cash deposits and insurance
among other things.

Next, Mr. Seymour explained that part of the purpose

of financial statements was to give the public or any
interested parties the opportunity to see what is and is not
working. He added that financial reports were required by
Oregon law.

Mr. Seymour then explained the purpose of

budgeting. He stated that budgeting gave accountability to
the people of the City and allowed them to comment. Mr.
Seymour noted that it started with a proposed budget with
enough time to allow the public time to review and comment.
He reminded the group that the public is welcome at all
budget meetings and noted concern that the public doesn't
seem interested.

Mr. Seymour commented that the Oregon Local

Budget Manual, which is available online, had a good
overview of the budget process.

In continued explanation, Mr. Seymour told the group

that the numbers were a spending plan that sets maximum
amounts. He noted that these numbers should be on the
high side and not all dollars would be spent, even if they are
budgeted.

Mr. Seymour stated that in his OpiniOn, the best

definition of government is that it should provide services and
amenities that cannot be provided by the private sector.
These, he continued, included police, fire and streets.

In response to a question from Mayor Dorrah, Mr.

Seymour explained that since the City Finance Director now
prepares the financial statements, the audit was completed
later than it had been when his firm prepared the statements.
He added that there was a financial savings to the City when
Ms. Dexter prepares them in-house.

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 In response to a question from Mr. Daugherty, Mr.
Seymour explained that there was not a need to keep the full
amount of termination liability in the budget. He stated that
not everyone would retire at the same time. Mr. Seymour
pointed out that some of this liability was in the water, sewer
and interim services budget. He indicated that the liability
amount was approximately $212,000 and was in the street
and general funds.

In response to a question from Mr. Clarke, Mr.

Seymour explained that if the liability went higher, the City
would need to review the policy for maximum leave accruals.
Ms. Dexter commented that the policy on maximum leave
accruals was enforced.

Mr. Seymour indicated that when Baker City funded

this liability in the past, it was the only city that did. He noted
that he did not think the citizens would want their tax dollars
to sit in a savings account when the money could prOVide
needed services.

Ms. Dexter and Mr. Kee explained that when a

retirement or termination is anticipated, funds are budgeted
to cover that liability. Ms. Dexter noted that after an
employee ends their employment, there is a vacancy which
usually ends up with a net savings.

#6) Year-to-Date Status Ms. Dexter then addressed the year-to-date status of
the City budget. She indicated that there were no surprises
at this time. As she reviewed the mid-year numbers she
stated that the actual ending fund balance for fiscal year
2009-2010 was $1,187,247. Ms. Dexter explained that it was
normal for that number to be higher than anticipated.

She continued her review, addressing revenue. Ms.

Dexter indicated that the County was a little behind because
of the recent flooding at the courthouse. She continued,
stating that ambulance revenues were a little higher due to
increased calls.

Ms. Dexter explained that although franchise fees

looked low, they were right in line. She noted that it was
mostly timing; some were due monthly, some quarterly.

As she finished the review, Ms. Dexter commented

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City Council Minutes Special Meeting January 18, 2011
 that the budget looked very positive.

#7) Upcoming Budget Next on the agenda was scheduling the upcoming
Calendar budget meetings.

Ms. Dexter, referring to a tentative schedule sent with

the agenda, explained that the dates were contingent on the
board's calendars.

Mr. Kee stated that these dates were tentative and

asked that group contact him if there were conflicts.

#8) Revenue Trends Next, Ms. Dexter reviewed the revenue trends for the
past years. She explained that she anticipated an
approximate increase of 3% in property taxes.

Ms. Dexter briefly commented on highway taxes, the

City-owned hydro-electric plant, ambulance revenues,
cemetery revenues, liquor and cigarette taxes, state revenue
sharing and franchise fees.

Mr. Kee addressed franchise fees, stating that they

were based on utilities that use the City's right-of-ways to
provide services. He explained that he was working on a
master right-of-way ordinance. Mr. Kee noted that this was a
possible option that would be presented to the Council in the
future. There was a brief discussion regarding this matter.
Mr. Kee indicated that if the Council agreed to such an
ordinance there would be public meetings to make sure the
details were complete.

Mr. Kee reminded the Council that he was trying to

put together a work session in February regarding revenues.

#9) Discussion of The next item on the agenda was a discussion of

Priorities, Philosophies, priorities, philosophies and services.
Services

Mr. Kee explained that his job, along with City staff,
was to help understand the priorities of the Council and to
accomplish those goals. He added that he was working on
"project sheets" for projects and major expenditures for the
upcoming budget. These, he noted, would be included with
the packets for the budget meetings.

Mr. Kee asked for advance notice from the board of

any issues or problems that need to be resolved. He

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City Council Minutes Special Meeting January 18,2011
 commented that he would like to meet with the board
members either one-on-one or in small groups over the next
months to help with the preliminary preparation of the budget.

There was a brief discussion regarding the project

sheets proposed by Mr. Kee.

Ms. Calder suggested that the City make more effort

to let the public know that their input is needed and wanted.
She asked if some community meetings would be scheduled.

Mr. Kee indicated that he planned on scheduling

some public meetings.

Ms. Calder requested a list of all grants and what the

City obligations would be for each. Mr. Ellingson added that
he would like the timeframes added to that list.

The group discussed hiring policies. Ms. Dexter

explained that this had been discussed, but until union
contracts expire those policies could not be changed.

Mr. Daugherty recommended reviewing the policy on

insurance and the Public Employees Retirement System
(PERS).

Mr. Button indicated that he would like to see some

options dealing with water, wastewater and streets with the
funds the City has.

In a brief discussion regarding property taxes, Ms.

Bonebrake explained that that tax rate could not be
increased.

Ms. Dexter indicated that she, Mr. Kee and Ms. Owen
were meeting with an expert regarding bond measures to see
if that was a viable option for the bigger projects. She
continued that there could be another rate study done to look
at other options.

Mr. Button commented that he would like to meet with

Public Works and the Public Works Advisory Committee
(PWAC) regarding street standards. He noted that perhaps
they were too high.

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City Council Minutes Special Meeting January 18,2011
#10) Preparation for Mr. Kee commented that he and the staff wanted to
2011·2012 Budget work with the Council and Budget Board as a team.
Meetings

Ms. Dexter invited all with questions to telephone or

email her.

#11) Adjourn With no further business to discuss the meeting was

ADJOURNED at 7:33 p.m.

SIGNED:, _
Mayor

ATTEST:, _
City Recorder

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City Council Minutes Special Meeting January 18,2011