July 1, 2002
Dear City Commission and Citizens of Stillwater:
Fiscal 2002-03 is the year of completing the aggressive capital plan items started in the prior fiscal year and implementing cost reductions in response to a slowing economy. At the time of the preparation of this budget, concerns were beginning to be expressed there might not be a recovery in the third quarter. All but the DOW Jones Average was in rapid decline. The economy was depending entirely on the consumer continuing to spend. The ENRON debacle was unfolding and hope remained this was an isolated case and exception in the world of private enterprise.
While sales tax revenues exceeded the prior year's receipts, they were below our projections as we neared the end of the fiscal year. Sales tax revenue for 2001-02 was $1,072,809 less than originally budgeted. The actual increase in receipts over the prior year was $85,896 for a .58% increase. For the next fiscal year, no increase in sales tax receipts is projected. Department managers were directed to delete all vehicles from the budget except for emergency vehicle replacements. The goal was to maintain or reduce each department's budget. Additionally, each department developed a contingency plan for further reductions. Each department had to identify what they would have to cut if their budget was reduced by 5%, and then by 5% again. Should sales tax revenues continue to decline, these lists would be the starting point for further budget reductions. Any reductions would be made with a review of the five year financial plan. As adopted by the city commission, the five year plan projects our cash balances for the next five years and shows our ability to maintain adequate cash reserves.
The first 5% cut list has a limited effect on personnel. The second 5% cut list has a significant effect on personnel numbers and services. Before cuts would be initiated from the second list, it is anticipated capital plan items in year three through five of the five year plan would be cut.
If the economy is headed for a long-term downturn, Stillwater's municipal government is fortunate to be near completion on most of its infrastructure upgrades. The demand for capital funds will be less in the future for all our basic city services except streets and utilities to new developments. The water treatment plant capacity has been doubled and the new sewer plant is under construction. The water treatment plant interim construction loan was converted to permanent (20-year) financing in February 2002. The current blended rate for this financing is 1.628%. The wastewater treatment plant interim construction loan carries an interest rate of 4.25% plus a 0.5% administrative fee. Both of these loans were made available through Oklahoma Water Resources Board programs. Many arterial streets have been upgraded using city reserve funds and many more will be done with the newly approved one-half cent sales tax dedicated to street improvements. The new Police Department and Municipal Building addition are 99% complete. The renovation of the original municipal building will be completed in October. The Senior Center has been doubled in size and renovated. The Multi Arts Center building has been completed and enrollments have increased dramatically. The Airport has implemented air traffic control which is primarily funded through federal programs. The runway is being extended by 1,400 feet to 7,400 feet with $3.78M in federal funding. All fire stations except the Oklahoma State University station have been remodeled with up-to-date facilities. All communications equipment in the police and fire departments have been upgraded with all digital switches for emergency communications equipment and wireless 911 location identifier equipment. All these projects were bid at a time when contractors were already experiencing a slow down in construction. Consequently, these projects have all come in under estimate and are providing citizens a good value for their tax dollars.
The following departmental budget summaries indicate the adjustments each department is making in response to the economy while at the same time making progress in improving the efficiency of its services to the citizens.
Several items in the budget for the City Manager's Office and General Government have been decreased including: office supplies, books & publications, food for meetings, training, and travel. Funds for a work study position were eliminated. The cost of natural gas for the municipal building was increased to $25,000 due to the additional square footage in the Police Department and Municipal Building. Funding is included to continue contracts for services with the Chamber of Commerce for economic development, Sheerar Museum, Downtown Stillwater, and Community Relations/Fair Housing Council. As in prior years, contingency funds in the amount of $200,000 have been set aside for the unexpected.
The 2002-03 Information Services budget will be used to maintain existing computer operations and complete projects such as: on-line access to building permits and utility billing information; implementation of application servers to revitalize and sustain older hardware; and standardization on Windows XP and Windows 2000 for desktops and servers to improve performance, system administration, and provide remote support capabilities.
Due to the declining economy, reductions were made in training, office supplies, and vehicle maintenance and fuel accounts. These reductions may make it necessary to take one department vehicle out of service some time during the budget year. It is hoped that the remote administration capabilities of the new Windows desktop and network operating systems will help offset this loss if it occurs.
The budget was reduced an additional $60,000 by purchasing extended warranties for 26 of the police department's ruggedized laptop computers rather than replacing the usual third (14 units) of the fleet. The units will eventually need to be replaced, but the extended warranties should keep them operable until they are no longer able to run the required software.
Human Resources will begin administering the 125 Plan in-house, in cooperation with the Finance Department, which will result in a $12,347 net savings during 2002-03. A review of prior year's expenditures identified an overpayment on the life insurance benefit provided to employees which will result in a $17,000 reimbursement and a lowering of the annual premium by $6,000. Total savings in the budget is $18,347 plus a reimbursement of $17,000 for a net reduction of $35,347.
From the original adopted budget for 2001-02 to the original adopted budget for 2002-03, the total increase in personnel services dollars will be 7.11%.
The City Attorney's Office will reduce expenses by providing the opportunity to transfer most legal publications to an on-line service. This year in order to balance the budget, Legal eliminated all out of state travel and training from the legal budget. For 2002-03, a subscription to a particular service was canceled and a more economical method for presentation of proclamations was identified.
The Finance Department has reorganized accounts receivable allowing one full-time position to be reduced through attrition. Finance hopes to achieve a refunding of the 1992 Revenue Bonds with $13M in outstanding principal. Surprisingly low short-term rates may result in a net savings of $600,000 over the remaining 7 years of the bonds.
During this last year, the Community Development Department has succeeded in finalizing the Comprehensive Community Development Plan and the Neighborhood Area Plans. These are now being used to direct the continued growth and development of the community.
Significant discussions have been held with county officials about how we work together on planning and development issues outside the city limits. County officials have elected to postpone further discussion to a later date.
A new process has been developed for review of site plans and building plans. This process provides more input up-front to lessen the likelihood of problems after construction begins. Funds are budgeted for posting signs on property to notify residents of pending applications for development. Local engineers and city staff will soon be exchanging plans digitally to reduce staff time to enter information into the City's GIS maps. This should enable us to keep up with new development entries into the system. Framing inspections have begun. Staffing changes have occurred this year in the Code Enforcement Division providing the opportunity to investigate new ways to conduct business in this area.
Efforts to address housing needs of the community were met through the homebuyer assistance program and the completion of the rehab of two houses. These programs will continue for the coming year. The Neighborwoods and tree voucher programs continue to provide opportunities for improving Stillwater's urban forest. Grants have provided $190,000 in funding for trees over the last 10 years!
Goals for the coming year include: finalization of a street, water, and sewer impact fee for new developments; a final draft of the new land development code; completion of the update to the downtown area plan; improve the time provided for inspections and CO's, improve accuracy of sewer line information in GIS; make the GIS information more readily available to staff and the public; continue various tree planting programs; and implement the approved CDBG projects. The approved budget for the Community Development Department is approximately $50,000 less than last year's budget. In addition, another $15,000 in reductions have been identified which could be put into place should the need arise.
The most important item for Public Works this coming budget year will be the beginning of the streets improvements made possible by the voter approval of a one-half cent sales tax in September 2001. This will upgrade and maintain many of the major roads as well as residential streets. The sales tax will run for five years, unless the voters approve an extension. The total amount of funding for street improvements generated by the additional one-half cent sales tax over the five years is projected to be $11.4M. Of that amount, $1.5M is dedicated to residential street maintenance including: crack sealing, seal coats, guard rails, curb repair, and concrete section replacements.
This year's Capital Improvement Plan includes the replacement of the Western Road Bridge over Stillwater Creek. The bridge is currently two lane, and is experiencing problems with the deck system. The new bridge will be 4 lanes with sidewalks on each side, to accommodate future improvements. The estimated cost for the new bridge is $1.5M. This unexpected item required a revision of the five year capital plan.
The Street Division has always had problems obtaining asphalt for pothole patching. An asphalt recycling plant has been approved that will allow the Street Department to produce small amounts of asphalt from either raw materials or millings. The truck and trailer used to haul heavy equipment will be replaced by a new low-boy trailer and a used tractor. These will address a major safety concern.
Traffic Control has the task of pavement markings. Paint does not wear well, so thermoplastic is used on the more highly traveled streets. Since large contractors are the only resource available for this installation, only large sections could be marked at one time. The approval of the purchase of small, hand-operated thermoplastic equipment will allow the repair of small areas by a city crew.
Computerized traffic counters were approved to assist in prioritizing street improvements. Thirteen intersections will receive the equipment needed to give emergency vehicles the green light.
A new garbage disposal contract goes into effect for the Sanitation Division. This will provide for green waste disposal separate from other household garbage at no extra cost to the customer. This will result in reduced landfill charges by reducing the amount of garbage added to the landfill. A 10-year contract has been entered into with the local landfill operator that fixes the costs for service.
The purchase of two new street sweepers has also been approved. This will result in the addition of one more sweeper to the fleet, and will allow for a shorter time period between sweeping of residential streets. Street sweeping expenses are funded through the refuse collection fees.
During the past budget year, several major improvements for the Parks, Events and Recreation Department were completed or are underway including: the Multi Arts Center, Lake McMurtry bait shop and office, Skateboard Park at Strickland Park, and renovation of the Senior Center. Two additions to the Kameoka Trail will be worked on over the next two years. In 2002-03 the section from McElroy to Hall of Fame will be constructed. Staff was notified in June 2002 that funding has been approved by ODOT for a section to connect North Boomer Lake to Parkview Estates. Planning for that extension will begin in 2003. The neighborhood is contributing some funding.
The budget for 2002-03 reflects a decrease in materials and services in the amount of $26,855 when compared to the adjusted amount in the 2001-02 budget. Personnel budget increases are due to an increase in benefit costs, step increases and the addition of approximately 1.5 custodial positions for the new and remodeled facilities for an increase of $27,758.
Capital items approved by the commission for the 2002-03 budget year consist of mostly infrastructure improvements or items necessary to maintain facilities. Projects include:
Not funded, but desired is new soccer fields in Babcock Park and an endowment for improvements at Lake McMurtry.
For fiscal year 2002-03, all increases to the Library materials budget were offset by decreases in the services budget to maintain a balanced budget with no overall increases and no disruption to the level of library services provided to all citizens of Payne County. With the return of the 3rd floor in the north building to meeting room space, the Library anticipates returning $9,300 to the general fund as contracted custodial services are reduced. City Commission has approved $15,000 for repainting the interior spaces of the Library and $3,500 for the purchase of an LCD projector for meeting room use. Effective July 8, 2002, fines for overdue library materials will increase to $.15 per item per day for books, CD music and audiocassettes, and $.25 for Inter-Library Loan materials. The fine for videocassettes and CD-ROMs will remain at $1.10. The Friends of the Library will continue to sell used books on a regular basis in the north lobby of the Library.
The 2002-03 budget allows the Police Department to maintain levels of service consistent to the past. Major projects include:
A number of items were not funded. The Detention Unit requested 6 additional jailers at a cost of $164,000, and CID requested $9,000 in digital cameras for use at crime scenes. The training unit's request for frangible ammunition for training was not funded, as was a request for electric service to the McMurtry firearms range at a cost of $40,453. Although these items would enhance aspects of the department, none will affect the service levels provided to citizens. The department moved into the new police building at the end of fiscal year 2001-02. The building is equipped with new items such as transmitters, a 911 switch, a new jail and dispatch consoles, all designed to improve efficiencies and service to our citizens.
Stillwater Emergency Coordination and Communications also benefited from a move to new quarters inclusive of some new equipment. Funding for operations of SECC remains consistent with previous year's levels. A new director replaced the retiring director of SECC. As a result, significant numbers of state mandated training classes are scheduled for the coming year. The major project funded in 2002-03 is the continued the replacement of 30-year old outdoor warning sirens. Five outdoor sirens will be replaced at a cost of $60,000.
Animal Control has created an $8,900 personnel account to provide an on-call animal control officer to respond to emergency weekend calls. An accompanying overtime account was increased to pay for overtime worked. Due to a decrease in the amount of donated food, the account for animal food was increased by $2,400. There were no capital projects requested for the upcoming fiscal year.
Calls for service to the Fire Department have increased by 10% during the previous year and are approaching 1,500 incidents per year. Ambulance calls are approaching 3,300 per year, a 5% increase. The Ambulance service received Advanced Life Support licensure at the ALS-Intermediate level in January 2002. Limited paramedic service delivery became operational with the deployment of three paramedics. All of the costs associated with providing advanced life support services have been off set by increasing revenues in providing those services. Oklahoma State University contributed one vehicle to help offset the costs of fire services provided to OSU.
A full-time paramedic responder/supervisor called "Medic One" will be deployed on or about January 1, 2003, to provide paramedic support on nearly all critical medical incidents. By delaying the deployment, the Fire Department was able to cut the current year budget request by $77,500.
The Fire Department deployed "first responder" chemical kits on all fire and ambulance apparatus. The kits include: chemical suits, gloves, and sheeting to protect fire personnel from chemical and biological agents. The development of a Special Operations unit to respond to specialized rescue situations, terrorist incidents, and chemical incidents is nearing completion. Capabilities will include: chemical and biological agent response, building collapse, trench rescue, confined space rescue, swift water rescue, and high elevation rescue.
The Fire Department's radio system is dramatically improved by the installation of a voter receiver system. The cost of the installation was shared between the rural fire account and the regular fire budget.
The rural fire service fee was revised to allocate charges on a per apparatus basis instead of per incident. Additionally, fees for rescue services were added to the fee schedule to assist in the maintenance and replacement of rescue tools. The rural fire account continues to shoulder more of the expenses in supplying rural fire services.
The Airport budget provides many needed items and services for the corporate, business, and many university related airport users. Continued funding for the air traffic control services will enhance the safety of flight operations for all airport users. Phase II of the runway extension project is included in the current budget and funding from the FAA is anticipated before the FAA 2002 budget ends in September. Phase II includes the earthwork, road relocation, utility relocation, and fencing required in the preparation for Phase III. Phase III includes: the paving of the extension, the relocation of the glide-slope transmitter, and the approach light system.
Other capital items included in the 2002-03 budget: terminal column repair; painting of the beacon tower; exterior repair on the flight center building; communications equipment upgrade; upgrade on airlock door system on terminal building; Phase II of the hangar #1 exterior upgrade; apron overlay (pending FAA funding); install and repair fencing; and weed/cedar control for the pastures. Items not included due to cutbacks/shortages: repaint the 1991 Blazer; replace Unit #822, 1991 Dodge 1/2 ton pickup; and replace carpet in office complex at 1818 W. Wright Drive.
Since the events of September 11, 2001, the airport will receive security mandates from FAA and TSA in Washington, beyond what has been self-imposed. Currently the new requirements and identified funding sources have not been communicated to the airports of this category. During the upcoming year the Authority is anticipating the addition of one new flight school which will offer a variety of services to airport users. The new school will also provide additional revenues for the airport.
The City Commission voted to carry forward $230,000 in last year's budget for building improvements to the Community Center. An anonymous donor has offered $500,000 to renovate portions of the west wing of the building. The Commission voted to re-establish a separate board to govern the Center and to develop a business plan. The City Commission expects the Board to develop a renovation plan for the entire building so the donated funds are wisely used. On February 8, 2000, a bond issue for renovation of the Center failed.
For 2002-03, a part-time custodial position was added to the Community Center staff. This position provides assistance on weekends and evenings when needed, as well as flexible weekly hours. As programming continues to increase in number of events and attendance, this position will provide staff support for the increasing workload.
In the past year, the Community Center incorporated four new JBL Stage Monitors to the existing sound system that will be utilized for both indoor and outdoor events. These monitors will present a professional sound and visual appeal for the new 2002-03 programming season and many seasons to follow. This purchase has eliminated an expense of equipment rental fees, risk of possible damage to borrowed equipment, and allows the Community Center to have more options available for future contracted users.
In June, the Community Center purchased (15) 72" round tables, (5) 18"x96" x 3/4 inch tables and (1) heavy duty table truck to supplement the current inventory. This inventory enables the Community Center to support multiple events or a large function with a uniform set-up, thus generating revenue. The tables will be beneficial to the set-up options for the new multi-purpose room.
A vital part of the Community Center's function is to present cultural events. The Community Center received $5,700 for programming from operation and maintenance accounts that had been on-hold in the last fiscal year. Although programming is costly, these funds will provide a funding source for smaller events that hopefully will result in generating programming revenue for future performances. The Community Center relies heavily on contributions and arts grants. Staff hopes to build an annual membership funding base in the next year to provide affordable programming.
The municipally owned and operated Lakeside Golf Course continues to increase revenues and rounds of golf played. The new golf pro and course superintendent continue to add improvements to the course renovation completed three years ago. Pleased with the new improvements, course patrons did not object to a rate increase so improvements could continue. The course should break even this fiscal year excluding the annual debt payment for the renovation.
The 2002-03-budget for the Water Utility realizes 100% completion of the upgrade and expansion project for the City's Water Treatment Plant. The completion of this project allows the City's water plant to meet 100% of the Stillwater community's water needs for the first time ever, and through the next 20 years. This project was funded through the Oklahoma Department of Environmental Quality's Drinking Water Statewide Revolving Fund (DWSRF) loan program.
In an effort to increase the water distribution system's reliability, and to replace or upgrade substandard water lines, the department continues this effort with plans to replace approximately five miles of waterlines for this budget year. The water system booster pump station located at S.H. 51 and Country Club Road is scheduled for a major expansion during the 2002-03 budget year. This will increase reliability and service levels for Stillwater's major growth area in the southwest.
A computer-based work order system was implemented during the 2000-01 budget year. During the 2002-03 budget year, 100% of water distribution and wastewater collection division's personnel will be trained in the proper use of the system. For 2002-03 budget year, the computer-based program will be expanded to include the complete automation of the water distribution and wastewater collection inventory process.
The 2002-03 existing rate structure will enable the water utility to fund all of the operation and maintenance expenses, capital expenditures, and to transfer approximately $750,000 to the City's General fund for administrative services.
Construction for the Wastewater Treatment Plant upgrade and expansion project began in October 2001. As of June 2002 the project is approximately 45% complete by cost, with the project currently on schedule. The total project funding is through the Oklahoma Water Resources Board Clean Water State Revolving Fund Loan Program for $20,735,000.
The upgrade and/or replacement of substandard sewer lines continue with the 2002-03 budget. There are approximately 3.5 miles of sewer line scheduled for replacement, and one of the two major interceptor trunk lines serving the wastewater plant is scheduled for an approximate $2,000,000 expansion (adding 1.5 miles of 24" to 48" lines) to meet the current and future needs of the Stillwater community through the year 2020. This budget year also includes approximately $212,955 for the extension of the City's sanitary system to homes within the current City limit that are using out-dated or substandard septic systems. The 2002-03 budget will also support the extension of the City's sanitary sewer system to two primary growth areas in Northeastern and Southwestern parts of the community.
The Wastewater Utility's existing rate structure enables the utility to fund all operation and maintenance expenses, capital funding expenditures, and to transfer approximately $1.0M to the City's General Fund for administrative services.
Pretreatment staff continues the implementation of the pretreatment program by monitoring and inspecting local industry. An industrial storm water discharge program has been implemented by the pretreatment staff for the Stillwater Municipal Airport. Inspections of airport facilities and sampling of storm water during storm events are required by this program. The award winning Household Hazardous Waste Collection event and pesticides education programs continue during the 2002-03-budget year. The 5th Annual Household Hazardous Waste Collection event will be conducted on September 28, 2002.
For Stillwater Power, this fiscal year will be the beginning of a two-year project to overhaul the two turbine generator units at Boomer Lake Station (BLS). For fiscal year 2002-03, Unit #1 will be overhauled at a budgeted cost of $200,000. Also at BLS, staff will complete the final year of the DCIS system rebuild at an estimated cost of $130,000. Additional upgrades include: work on the BLS SCADA and relay equipment for $40,000, and the replacement of two additional substation breakers for $50,000.
Funds budgeted for system extensions to new customers for the next year total $350,000. In the overhead rebuild category, a section of Feeder #1 along Perkins Road will be re-conductored with higher capacity wires at an estimated cost of $50,000. A total of $40,000 was allocated to move poles and make provisions as required for the Lakeview Road reconstruction project west of Washington.
SP plans to rebuild the underground residential distribution system in the Quail Ridge area. This rebuild is the next one in an on-going series to rebuild neighborhood underground systems that were installed in the late 1960's and 1970's. This project is estimated at $145,000. A two-block stretch of overhead conductor on Glenwood Street will be replaced with underground wires and padmount equipment to eliminate some major tree conflict problems in that area. This project is planned for $65,000.
For fiscal year 2002-03, $25,000 has been allocated for the Subdivision Incentive Policy and $15,000 for the Customer Incentives. The latter is a new program to help fund heat pumps and electric water heaters in residential construction. In the past year, Stillwater Power Trustees elected to fall under State regulation in return for the right to compete for customers outside the city limits. This should improve Stillwater Power's ability to secure new customers in several growth areas.
Reductions made by the Trustees from the proposed departmental budget include half of the Advertising budget ($14,725) and half of the Advertising Consultant budget ($7,500).
Vehicle purchases authorized for 2002-03 total $852,282. Of this total, $611,000 will be done through a lease purchase program. Requests totaling $578,500 were not approved by the city manager for submittal to the commission. Many were requests for new pickups. The average age of the fleet for all vehicles and heavy equipment, excluding police cars, is 10.45 years which is acceptable.
Adjustments in Rates and Fees: No utility rate increases are planned for this fiscal year. With homeowners facing huge increases in homeowners insurance costs and the decline in the economy, municipal rate increases would be inappropriate at this time. Service fees may be increased if the actual costs to provide the service increase. Sanitation fees may increase if the savings anticipated in the separate disposal of yard waste does not materialize.
Sales Tax Revenues: Last year's sales tax revenues were $1,072,809 less than originally budgeted. The actual increase in receipts over the prior year was only $85,896 for a .58% increase! For the next fiscal year, we estimate no increase in sales tax receipts.
Personnel increases authorized in the new fiscal year included: the addition of one full-time custodian for the new Multi Arts Center Building; converting a part-time custodian that now does the PER administration building to a full-time position to also do the expanded and renovated Senior Center; a medical officer for each ambulance shift; and two additional part-time custodians and one full-time custodian for the new Police Department and Municipal Building.
A few statistics: The total budget for all funds for 2002-03 is $80,900,605.
The General Fund increased from $23,824,115 to $24,403,084. This includes: all services except the utilities, the street & alley fund, debt funds, airport, golf course, sanitation, self-insurance, community center, and fleet maintenance.
The Stillwater Utility Authority, which includes Stillwater Power and the Water and Wastewater Utilities, decreased from $60,436,508 to $42,437,809. The prior year included $18,908,743 for the wastewater treatment plant upgrade. The cost for power for resale increased by $946,596 to $16,651,762 due to expected increased usage and a projected increased power cost adjustment charge from the Grand River Dam Authority.
The General Fund continues to be budgeted at a year-end balance of $1,000,000. The year-end balance of the SUA is budgeted to decrease by $8,093,963 to a total $10,663,316.
Commission Directives: During the budget review, commission members expressed a number of requests. When stating the personnel authorized in each department, the commission would like to see full-time equivalent numbers. A concern was expressed about the HVAC system on the Humane Society side of the Animal Shelter. When next year's budget is prepared, the commission wants to begin setting aside funds to have a fleet maintenance facility. During the coming year, the commission wants to revisit the five year capital plan and how to finance more improvements. The review is to include the use of impact fees for new developments. In the future, the commission also hopes to fund a concession stand for Southern Woods, a restroom for the off road motor cycle track visited by numerous people from out of state, and provide a faster backup system for IS. Staff was directed to begin negotiating with the unions to achieve employee participation in the payment of health insurance premiums.
Many staff members spent a considerable amount of time preparing this document for the public. 'Special Thanks' go to Nancy Franklin, Marcy Alexander, and Tammy Brown. Our goal is to provide the citizens a complete accounting of the use of the funds collected to provide city services so we can maintain their confidence in local government. We are very appreciative of and very proud of the new Police Department and Municipal Building which is nearing completion. This would not have been possible without the support and confidence of the Stillwater residents.
Sincerely,
Carl Weinaug
City Manager
Mary Rupp
Assistant City Manager