Loading...
Approved Minutes - 2012-04-26 LAKE OSWEGO Centennial1910-2010 CITY OF LAKE OSWEGO BUDGET COMMITTEE MINUTES April 26, 2012 Proposed FY 2012-13 Budget Members present: Jack Hoffman, Mayor Kent Studebaker, Chair Sally Moncrieff Dave Berg Jeff Gudman Craig Prosser Mike Kehoe Chris Ramey Mary Olson Ron Smith Bill Tierney Kathleen Taylor Joe Vricella Members excused: Donna Jordan Staff present: David Donaldson, City Manager Brant Williams, Assistant City Manager Ursula Euler, Finance Director Shawn Cross, Assistant Finance Director Jordan Wheeler, Assistant to the City Manager Kam Frederickson, Budget Analyst David Powell, City Attorney Ed Wilson, Fire Chief Guy Graham, Public Works Director Anthony Hooper, Management Analyst Megan Phelan, Human Resources Director Christine Kirk, Public Affairs Manager Welcome and Introductions Chair Ron Smith called the meeting to order at 6:03 p.m. in the Council Chambers of City Hall. He conducted a round of introductions. He thanked former members Frank Bearden and Dan Williams for their service last year. Elections for Budget Chair and Vice Chair Gudman nominated Studebaker to serve as chair. Kehoe seconded the nomination and Chair Kent Studebaker was elected by unanimous consent. Gudman nominated Berg to serve as vice chair. Ramey seconded the nomination and Vice Chair Dave Berg was elected by unanimous vote. Approval of prior budget committee meeting minutes from May 19, 2011 and May 24, 2011 Gudman moved to approve the Minutes of May 19, 2011 and May 24, 2011. Berg seconded the motion and it passed majority vote. Prosser abstained. City of Lake Oswego Budget Committee Page 1 of 10 Minutes of April 26, 2012 Role of the Budget Committee; ground rules; expectations; and background information Chair Studebaker asked the Committee members to stay focused, be engaged, be open, and be respectful. City Manager Donaldson distributed information from the Oregon Department of Revenue that described the role of the Budget Committee. Two important aspects were to be a public involvement vehicle and to set a tax rate before June 30. He proposed some ground rules to improve and streamline the meetings. Proposed Ground Rules • Start the meetings at 6:00 p.m. and end by 9:00 p.m. • Provide opportunities for public testimony. The state required the committee to offer least one opportunity. That night it was scheduled at the end of the meeting. The Budget Committee could decide if it wanted to offer it more often and when. • Allow every member an opportunity to speak. • Don't deliberate outside the meetings • Passage of a motion had to be by the majority of the entire committee (at least 8) not just a majority of those present. • Focus on the big picture issues. • Email or call the staff with questions. • Treat citizens with respect • Strive to keep suggested changes to a $10,000 minimum in order to not spend valuable time focused on minor issues. • Suggested changes were to be recorded and set aside for deliberations. The staff would update and post the list. Committee members suggested scheduling time for citizen input at both the beginning and end of future meetings. Chair Studebaker asked members who suggested additions and deletions to also offer a statement about why they suggested it. Any debate about it would take place during deliberations. Smith asked staff to suggest a realistic cut-off time for submitting questions for them to respond to at the next meeting. Euler suggested they submit them by Monday 5:00 p.m. Council Goals Mayor Hoffman discussed the seven major goals the City Council had adopted (see page i-28). He clarified that the Council planned to prioritize them in May and then consider an implementation Plan. 1. Comprehensive strategy for funding major capital facilities and transportation projects: LOCOM, North Anchor Project, Library, City Hall, West End Building, Tennis Facility, etc. In April the Council discussed how to prioritize the projects and in May will discuss the funding strategy. 2. Lake Grove Redevelopment. The funding strategy involved urban renewal. Some kind of gap financing would be necessary until tax increment financing was sufficiently large enough to pay for the project years from now. The Council had directed the staff to continue to plan the Lake Grove Village / Boones Ferry improvement project. Any funding project was to include streets and parking. 3. Foothills Redevelopment. The Council had decided to move forward with 'Plan B,' a revised framework plan without a streetcar— an urban-type of neighborhood. The City of Lake Oswego Budget Committee Page 2 of 10 Minutes of April 26, 2012 consultants were to present plan to meet the City's objectives in June. There would be an urban renewal district on the north end of Foothills. It would be rezoned to allow more density. The Council was to consider a development agreement with a developer by the end of the year. 4. Natural Resource Protection Program. The Council was to hear a related report in the next month or so. 5. Indoor Tennis Facility. The Council had applied to Metro to expand the Urban Growth Boundary to include the Rassekh property (possible location of Tennis Facility) and Luscher Farm related properties. The City got an extension of time from Metro to use to answer questions and concerns raised by the Stafford Hamlet and the Clackamas County Board of Commissioners. 6. City Manager Recruitment. The Council had appointed Donaldson as City Manager in February. In October it would begin the recruitment process for a new City Manager. 7. City Work Plan. The plan would include work on a North Anchor project; Foothills; redevelopment of 2nd Street; a Downtown parking plan; A Avenue refinement; Lake Grove Village Center; the Capital Improvement Plan; redesign of the City website; the final audit of the CDC; the budget issues; and many plans, including the Comprehensive Plan update, the Parks plan; the Luscher area plan; the transportation system plan, and the wastewater master plan. The Lake Oswego-Tigard Water Partnership project was currently budgeted at $230 million but the project was complex and that amount could change. Tierney observed the new tennis facility was to be funded by a revenue bond - not the General Fund - so it could be a priority while the Council was prioritizing other City facilities. City Manager's Budget Message presented with Major Changes and Themes Chair Studebaker commended the staff for sending outstanding preparation materials to the Committee members in a very timely fashion. City Manager Donaldson presented the Budget Message. ➢ Financial Trends, Policies, and Guiding Principles Donaldson reported the administration proposed a $242 million budget: $102 million for total operations; and $68.8 million budget for the General Fund. He noted that large capital and financing items tended to distort what had really changed from year to year. He reported that without those items, General Fund Personnel Services had gone up 5.7% this year while Materials & Services went down 5.4%, so overall the total General Fund was up 2.3%. He discussed budget drivers to keep an eye on this year: • Declining home values. The impact of real market values falling below assessed values was of concern to City managers throughout the state because they were not getting the 3% increase in property taxes. Fortunately, Lake Oswego market values were fairly strong and the City did not have a lot of properties that were in that situation. • Building activity. Residential and commercial building activity was showing positive trends. The City hit a low about four years ago when building department revenues declined from about $1.5 million to $600,000 and the City laid off four employees. Since then there had been a steady increase in revenues to $1 million. Commercial permit revenue had almost doubled and residential permits were also up. • Slow population growth. Growth had been slow for two years. The City had only added 55 people since last year. City of Lake Oswego Budget Committee Page 3 of 10 Minutes of April 26, 2012 • PERS and health insurance obligations. PERS rates are changed every 2 years (the City is currently in the 2nd year). The projection was they could go up another 4 percentage points. The administration was thinking about that and planning for it. The City's work force was in three different levels of retirement systems. The administration had put health insurance coverage out for bid and the resulting lower renewal rate increase was 4.8%. • Utility infrastructure needs (rates). A large part of the budget was driven by utility infrastructure needs such as streets, sewer, and water. • Facility and equipment replacement. The City had an aging fleet and no equipment replacement fund. It owned some 1991 and 1992 vehicles and had no plan for replacing them. It had set some money aside for the most expensive equipment, such as fire trucks, but it was not enough to replace them in the future. The staff had used the Five-Year Forecast in creating the proposed budget. It forecasted, estimated and sequenced predictable things. There were tradeoffs involved related to what to do earlier or later. It was a good starting place for prioritizing things and making decisions. Donaldson pointed out the packet contained Development Principles and Assumptions. He referred to master fees and charges and explained that he understood that utility rates were of concern to many in the community. He suggested the following parameters for budgeting. Budget Goals and Process • Hold the line on Materials & Services. That had been the City Manager's message to staff. • Maintain current service levels. There was a correlation between staffing and service level. • Incorporate Council goals, budget principles and the CIP plan • Plan accordingly for capital and equipment replacement • Maintain the AAA bond rating. The City would be selling over$100 million in bonds this year. To lose that rating would mean an increase in interest rates and would send a message to the community that the City was headed in the wrong direction. • Achieve a productive and efficient budget committee process. The City Manager had put a lot of background material in the budget notebook to help frame the issues. ➢ Major Changes and Proposed Budget Highlights Donaldson talked about what was different in the proposed budget. The City Council had directed the administration to prepare it without the normal 3% increase in property tax rate, which normally amount to $750,000. In a period of declining home values it might not be that much. The budget used the Unreserved Fund Balance in the General Fund to fund Capital Spending ($561,000). Otherwise expenditures would have exceeded revenues. The one-year Franchise Fee increases were expiring in July and August. Many other communities in Oregon charged 5%. Lake Oswego had raised its electric utility franchise fee from 3.5% to 5%; its garbage franchise fee by 1%; and the Northwest Natural franchise from 3% to 5% in order to produce some additional revenue to pass along to the School District. The City would issue $65.5 million in Water Bonds. He anticipated the Committee would discuss Permanent FTE Changes (Utilities/Engineering) and Parks & Recreation Temp FTE changes. The Committee was going to discuss how to how to count part time and contract workers. In his 5 years with City of Lake Oswego Budget Committee Page 4 of 10 Minutes of April 26, 2012 the City there had always been a lot of interest and scrutiny about how many employees the City had and how they were counted. In general the City would be hiring just one or two new employees. One-Time Expenditures Highlights There were relatively fewer large, one-time expenditures this year. That contributed to the reduction in Materials & Services. A significant one was code streamlining and implementation of the code audit. The City Council had all agreed there was a need for it. Questions of the City Manager Tierney asked Donaldson to explain what it took to maintain an AAA bond rating. Donaldson said the answer was never really clear when he asked that. What he did know was that the bond rating agencies were scrutinizing cities more than ever now. They knew what was going on here and were asking hard questions such as whether the City would continue to give money to the School District. Tierney asked how the reserve fund factored into the AAA rating. Euler related the agencies were very interested in fund balance and cash. When a member of the wastewater bond rating team spoke at a recent conference he had advised that rating agencies were `obsessed' with fund balance and they were not that interested in debt. She said they did not go by Lake Oswego's required 14% and 16% fund balance requirements. She had recomputed two factors she knew the rating agencies used for computations— cash and fund balance - to see what would happen. The median values for other AAA rated cities was 48%. Lake Oswego's was 39%. She had discussed that with financial advisors. They advised there were many factors, and some of them were positive for Lake Oswego. For example, median per capita and household income was above average. Berg indicated that he appreciated that she had done that. He asked what the greatest challenge was right now. Donaldson responded that it was that many needs were competing for the same pot of money. For example, he wanted to maintain the quality of parks and services in the community but at the same time address the need to replace infrastructure. Olson recalled the City Council had been surprised to hear about the large unexpected actual surplus last year. The Council had put some of the money back into the library reserve fund but it had not talked about what to do with the rest. She pointed out to the Budget Committee and citizens that a lot of that surplus had been rolled into the beginning fund balance. She wanted to know how much had been spent and how much had been rolled into the beginning fund balance. Euler confirmed that what was left over from the last fiscal year had been rolled into the beginning fund balance for the current fiscal year (see page i-17). But the beginning fund balance was not the entire answer. She would come back to the committee with the entire answer. Gudman asked if Donaldson would recommend what to do with the money if FY2011-12 ended with a surplus. Should it all be rolled into the Beginning Fund Balance? Donaldson suggested the funds could be used for one-time capital needs or to create reserve funds for things like fire trucks. Prosser asked Donaldson to expound on the sentence on page i-5 that said, The forecast brings attention to the growing concern that without strategic measures the City's General Fund will be unable to meet minimum reserve requirements by FY2014-15.' He wanted to know how far short the budget was falling and how that would relate to Budget Committee decisions. City of Lake Oswego Budget Committee Page 5 of 10 Minutes of April 26, 2012 Donaldson indicated the Five Year Forecast would help the City anticipate things it knew with certainty, but each of the last five budgets had been impacted by changes that had not been anticipated, for example, the library district and the WEB. Ramey asked how raising the franchise fees to a level commensurate with other cities would affect the AAA rating. Donaldson related that the rating agencies were concerned that the City would continue to budget $2 million for the School District from now on because it could impact the City's ability to meet fund balance requirements in the future. He advised that the City was not technically allowed to give property tax revenue to the School District. The total franchise fees was roughly $2.8 million and covered what the City gave the School District. Some came from parts of the General Fund and some came from the Street Fund. Gudman thanked the staff for matching transfers in with transfers out in a manner that could be traced. He thanked Tierney for asking for that. Tierney called attention to several things for the Budget Committee. The Council had asked for a budget that did not have the normal, built-in, 3% increase in property taxes. That would offer latitude going forward. In the proposed budget expenditures exceeded revenues by $561,000. The draft Capital Budget had holes in it where there were no funds going forward. For example, Annual Street Maintenance was funded this year, but not in following years. The same holes were in Annual Water Maintenance. There was money in the current budget for Parks Rehabilitation, but nothing in the future. How the City dealt with those things would be the challenge. Mayor Hoffman was concerned that the forecast was the City would be unable to meet minimum reserve requirements by 2014-15. He noted the property tax rate had been reduced by 15 cents; the budget was not balanced because the City was borrowing from savings; and the minimum reserve drove the AAA bond rating. He remarked that the community demanded high standards for things like parks and recreation and public safety. He wanted the Committee to consider equipment replacement. Smith wanted to know where there were staffing talent and resource deficits and what things were not getting done because the City did not have those resources on board. FY2012-13 Proposed Budget Overview ➢ Revenue Euler called attention to the 2012-13 Citywide Resources and Revenues tables in the Budget Overview. Total Resources were $242,540,322. She discussed components in order of significance. Property taxes, followed by Sales & Services, were the City's main revenue sources. A large portion of Sales & Services was related to utility customer and service fees. Intergovernmental revenue was larger than in previous years. That was because Lake Oswego was managing the water project and paying all the bills and then billing Tigard for its share. Transfers In were matched to Transfers Out. Euler discussed how much influence the City had over revenue. Property tax revenue was dependent on assessed value and real market values. The average RMV and the average assessed value of the properties in the City's pool of properties were currently far apart. However, as real market values declined the county assessor might not be able to raise assessed values by 3% on individual properties. That had started to happen. The amount of Intergovernmental revenue the City got from the Library District was also somewhat dependent City of Lake Oswego Budget Committee Page 6 of 10 Minutes of April 26, 2012 on real market values. Some intergovernmental revenue depended on how much people drank and smoked and how much gas they bought. LORA reimbursements for management services and state reimbursement for 911 services were Intergovernmental revenue. Revenue from contracts with neighboring cities for 911 services the City provided was reflected in Sales & Services. Revenue from Licenses and Fees was affected by the level of tourism and hotel occupancy; the level of permitting activity; the number of passports and business licenses issued; and when the Engineering Department paid for themselves internally when they built a project. Sales & Services included revenue from parks program fees. The City had not raised those fees in quite a while in order to be sensitive to the economy. The little bit of leverage it could achieve by doing so would be a fairly small part of City revenue. Director Euler discussed Revenue Levers. The City could adjust the property tax rate; increase City fees; decrease revenue-raising programs; and increase franchise fees. The tax rate could be as much as $5.0353. Lake Oswego was one of the few communities that had not maxed out its permanent tax rate, which was currently $4.9703. It was proposed to be $4.8203. Other cities had imposed an in-lieu utility tax. If Lake Oswego wanted to do that it would have to check to see whether the City Charter allowed it. ➢ Expenditures Personnel services was the City's largest expenditure because the City was a service organization and people were its main asset. That was followed by Capital Outlay; Materials & Services; Transfers and Debt Service. The major drivers were the level of direct government services to outside customers; the level of administrative services to internal customers, and Capital Projects. Euler referred to the Budget Overview— General Fund Expenditures, 2012-13 General Fund Requirements table. 72% of General Fund expenditures were due to compensation. She reported she was still working on proposed budget scenarios and the Five Year Forecast. The lines on the Forecast were crossing two and three years out. It was just a matter of time before the rate of increase of expenditures outpaced revenue growth. That had to be managed over the longer term. ➢ Fund Balance / Reserves Euler referred to the Budget Overview— Fund Balance table. She advised that it was budgeted balances, a plan, and the balances were not necessarily what the City hoped to end up with. The City would not spend every dollar budgeted. It was not allowed to overspend its budget. She planned to have the `forecasted' balances and the Five-Year Forecast ready and explain them at the next meeting. She pointed out that new accounting rules required the nomenclature for fund balance to be Non-spendable,' `Restricted,' `Committed,' `Assigned,' or `Unassigned.' The committee took a ten minute break and then reconvened. Overview of Budget Drivers, Issues and Trends ➢ Equipment/Vehicle Replacement Set-Asides/Reserves Anthony Hooper referred to the Vehicle Replacement Schedules table on page 17 of the CIP to give context to what it meant to the General Fund. The CIP currently listed $2.8 million worth of vehicle needs in the out years of 2013-14 to 2016-17. The CIP anticipated the projected amounts would be funded in each future budget. The amounts were built into the Five Year Forecast. The City had already set aside $650,000 for one, $1 million fire truck to be purchased in 2014-15. Last year's Budget Committee had set aside $144,000 for future vehicle purchases. That reduced the $2.8 million need to $2 million worth of needs in the next four years. Beyond City of Lake Oswego Budget Committee Page 7 of 10 Minutes of April 26, 2012 that there was nothing set aside. The staff suggested putting away $535,000 per year towards the listed items in order to accumulate $5.350 million over the next 10 years to purchase them. Hooper reported the City's fleet of 175 vehicles (108 in the General Fund)was an aging fleet. 47 of the 108 vehicles in the General Fund were beyond replacement age (typically 10 years). $2 million understated the actual need. The City just 'made do' with older vehicles. The two vehicles needed in the Surface Water Fund were a street sweeper ($400,000) and a high pressure cleaner to clean out catch basins. The Fund only contained $200,000 for both vehicles and capital projects. Donaldson clarified that the $1 million fire truck was a ladder truck at the Jean Road station. The City had a second fire truck. The trucks had a 15-year life and after that they were to be placed in reserve for another five years to they would be used for a total of 20 years. Hooper confirmed for Berg that the City needed to budget to set aside about $500,000 a year to replace General Fund vehicles. Euler advised the $650,000 that had already been set aside left for a fire truck would still be in General Fund reserves at the end of the upcoming budget year. She noted the CIP showed actual purchases planned in 2014-15 and 2015-16 included two fire trucks. They would cost a total of$1.7 million. The staff was recommending budgeting some 'seed money' to establish a replacement fund and then building it up each year by about $535,000 so those purchases could be made using the replacement fund and would not have to come out of the General Fund in the future. The City did not need to assume it would fund 100% of vehicle purchases with cash, but cash gave the City more flexibility to purchase vehicles and equipment. Tierney asked why the Surface Water fund had to buy the street sweeper and high pressure cleaner. Hooper advised that in the past the utilities paid for their equipment, but General Funds could be used for them. Money for a street sweeper had not come out of the Street Fund because the main purpose of the sweeper was related to surface water management- not to make streets look nice. The City could decide to use Street Funds, but that fund was also pretty stretched. Donaldson advised that many vehicles should be replaced but the Police vehicles were at the top of the list because those were the most important vehicles needing replacement. He clarified that the $386,000 the Vehicle Replacement Schedule showed as 'Budgeted 2012-13' was in the proposed budget. The $300,000 shown in FY2013-14 could likely be absorbed into that budget. But it was the year after that he was concerned about. There were no funds set aside to make the FY2014-15 purchases other than the $650,000 already set aside for the fire truck. A fund needed to be built up to pay for them. Gudman asked what the difference was between CIP items that were shown as `funded' and `unfunded.' Hooper explained the CIP assumed (based on five year projections) that a fund would have the money to pay for `funded' projects. If the projections (the City's best estimates) showed there would not be enough fund balance left over to meet the minimum balance requirement the project could not be done... it was `unfunded.' Euler clarified that the CIP drove the Five Year Forecast and assumed everything would be paid for in cash funded out of operations. It did not factor in any leases or loans. ➢ Major Capital Facilities Needs/Financing Analysis Hooper related that Brant Williams had been talking with the Council about all the capital facilities. Staff was going to ask the City Council to prioritize them on May 15. The list included the following items and their estimated costs: Public safety facility (Police/ LOCOM/ Municipal Court) $12.3 million South Shore Fire Station 3 million Maintenance Facility (Operations) 17 million City of Lake Oswego Budget Committee Page 8 of 10 Minutes of April 26, 2012 City Hall 14 million Tennis Facility 4.9 million West End Building (principle balance) 19.4 million Library (as part of the North Anchor project) 43 million Boones Ferry Road — Phase 1 23 million Tierney clarified that all of those projects except for Boones Ferry Road were anticipated to be funded by a general obligation bond. The community would vote on it. Berg calculated that would be a $134 million bill. Olson asked for a breakdown of the $1.55 million expense for the West End property (see page i-14). Euler related that the hierarchy of payments was to pay interest first. The interest rate was variable and it was currently 1%. It was estimated to be almost $200,000 at the end of this year. Next, the minimum required principle payment would be paid. $850,000 was due every October 1 for three years. The City had already made one of those payments. After that the staff would like to use funds as needed to keep the building open and operational. Councilor Olson noted that was a half million dollars. She recalled the chillers and boilers were going to be replaced this year. She wanted to know what the money would be used for during the budget year. Donaldson explained the contract for the chillers and boiler was going to be presented to Council on May 15. The project might only be able to spend $350,000 this fiscal year. What was left of the $550,000 would be used to repay principle. The plan was to make extra principle payments if the City had the money to do that each year. He clarified there were no other major repairs do be done on the WEB. Olson referred to the Citywide fund balances sheet on page i-17. It showed the Tri-Met Loan Receivable was $1,780,000 in the Beginning Fund Balance and zero in the Ending Fund Balance. She asked where the $1.78 million would go when Tri-Met paid it back. Euler advised that Tri-Met was to pay $1.78 million back in September 2012 and part of it would be spent because it was a resource. Smith asked Euler if there would be any cash flow pinches related to the water partnership project. She related Tigard got its $100 million financing in April. Lake Oswego anticipated issuing a bond in the amount of$65 million. That money should be available to the City in mid- September. The City would need it then because the project would ramp up after September. Public Comment— Input Opportunities Scott Symer, 51 Briarwood Rd., Lake Oswego, President of the Lake Oswego Municipal Employee's Association (LOMEA), AFSCME local 1546, related that the union represented 169 City employees. LOMEA was currently negotiating its next labor agreement with the City. The union had examined the budget documents and was pleased to see that the financial proposals that the union had brought to the bargaining table were substantially in line with the goals and assumptions that were used in creating the budget. Its wage proposal was the current Portland consumer price index which was just below the proposed budget projection of 3%. They noted that the City's aggregate insurance renewals for the coming year were estimated to come in at a manageable 5%. The union was proposing maintaining employee's share of the insurance premium payment. The City's wage proposal was significantly lower than current CPI and the City was proposing to double employees' health care premium share. Because the City's proposal failed to keep employees up with inflation and it doubled the employees' premium share it was the equivalent to a wage cut. Symer explained that it was hard to understand the City's position when the Council had recently ratified agreements with employees of the Police and Fire Departments that were actually more generous than what LOMEA was currently asking City of Lake Oswego Budget Committee Page 9 of 10 Minutes of April 26, 2012 for. LOMEA members did not deserve anything less than the raise and benefits the Council had recently approved for Police and Fire workers. The City Council was the steward of the organization and responsible for ensuring that it was able to meet the community's needs into the future. The constraints of budgets and facilities that the staff had dealt with for as long as Mr. Symer could remember had demanded that every element of the organization function at a very high level. Even in the current job market everyone knew that good employees were always in demand. The Council had discussed the challenges the City faced in attracting top tier candidates for the city manager and planning director positions. Mr. Symer related the City's proposal had `slashed the morale' of employees. Like workers everywhere, Mr. Symer and his co-workers wanted to spend their working lives in high-functioning organizations that made the most of their talents, skills and abilities. As a group they were very proud of the City and the work they did there. They were happy to see the community benefitted greatly from their work but they believed that they deserved to be treated fairly. They asked the Council to direct its bargaining team to put a proposal forward that recognized the value of their work; kept their wages up with inflation so they did not fall behind; and maintained their current premium share split. Next meeting — Overview and review of other funds The next meeting was scheduled on May 3. Euler planned to talk about the General Fund. She confirmed she would discuss changes in health care costs and tax revenue. She was still fine- tuning the numbers, but she might suggest reducing revenue by $250,000 for property taxes. She recalled the decrease in health insurance cost was around $160,000. That could partially offset the reduction in revenue. She agreed with Berg's observation that General Fund revenue would be relatively flat in the foreseeable future. The things like fee increases that could be done to increase revenue might only increase it by $2 million. Mayor Hoffman observed that there were some longer-term options. The City could realize more property tax revenue if certain areas were up-zoned to accommodate more development; if unincorporated areas were annexed; and if the City found businesses to move to the City or build in the City. Tierney asked the staff to place on the running list: a vehicle replacement program; and addressing the underfunding of capital projects. Adjournment Chair Studebaker adjourned the meeting at 8:25 p.m. Respectfully submitted, Kam Frederickson /s/ Kam Frederickson Budget & Financial Analyst APPROVED BY THE BUDGET COMMITTEE: May 10, 2012 City of Lake Oswego Budget Committee Page 10 of 10 Minutes of April 26, 2012