05-Council Minutes from the meetings of August 16, 17, and 23, 2010

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In addition, a very limited number of capital items will be purchased through the City's internal equipment replacement loan fund on a three-year term at three percent interest (to recapitalize the fund). Specifically: 1. EMS - $120,000 for annual fleet replacement program of one ambulance. 2. Fire Department - $70,000 to replace the existing and non-compliant personal alert safety system (PASS) and $24,200 to replace rescue tools (e.g. "jaws of life") that are old enough that replacement parts are increasingly more difficult and expensive to acquire. The old PASS system is still functional but no longer meets NFPA standards and will be transferred to Public Works for their use in confined space and other hazardous work areas. The new rescue tools will be placed on the engines instead of the rescue truck, allowing the rescue truck to remain in the station instead of responding with an engine and thereby reducing maintenance and operation expenses for the rescue truck. 3. Police Department - $53,116 for two patrol cars (reducing its annual fleet replacement program from four patrol cars to two). Conclusion The desire of City Councils to maintain the lowest ad valorem tax rate as possible is understandable, particularly given the overall economic climate. It is also important for economic development purposes to have a tax rate that is competitive with other communities. However, creating an artificially low tax rate by deferring maintenance and/or planning for known future expenses is not successful in the long-term and usually creates a more painful fiscal environment for the future. The proposed $0.5200 tax rate will be the third consecutive year the rate has remained the same and is the result of a $0.17 rate drop from FY 2005-2006 to FY 2008-2009 and is a 2.3 percent decrease in the effective rate (the rate that brings in the same amount of dollars as the previous year). There are several looming fiscal issues that must eventually be addressed. First, in addition to several million dollars of street, sidewalk, and drainage projects there are also a couple of million dollars worth of fire trucks that will be reaching the end of their service lives and credit for ISO rating (this will happen at about the same time because the City found itself in a similar situation in 1996 and had to purchase several trucks all at once). Another $243 million is needed in rehabilitation/renovation of city facilities, City Hall being a primary one. Second, the City's water and wastewater infrastructure (including distribution, collection, and treatment) needs tens of millions of dollars in rehabilitation and improvements. For example, the wastewater treatment plant master plan alone calls for $35-40 million to replace the existing plant. Over the last few years, using results from the annual water and wastewater rate study, the Council has been adjusting rates to make the wastewater system self-sufficient and begin establishing healthy reserves for both systems. Nonetheless, the new wastewater treatment plant and repair and replacement of other deteriorating water and wastewater infrastructure present a significant challenge to the rate structure.