July 1, 2003

Dear City Commission and Citizens of Stillwater:

The budget adopted by the Stillwater City Commission for 2003-04 primarily takes care of the day-to-day operational expenditures to maintain the level of service citizens have come to rely on. The total budget for all funds for 2003-04 is $76,999,435.

General Fund expenditures decreased from $24,403,084 to $21,576,354 for 2003-04. The General Fund includes all services except utilities, street & alley, debt service, airport, golf course, sanitation, self-insurance, community center, and fleet maintenance.

Stillwater Utilities Authority expenditures, which include Stillwater Power and the Water Utility, increased from $35,858,515 to $39,340,018 for 2003-04. The cost for power for resale decreased by $437,717 to $16,214,045 due to the previous year's growth being less than expected.

Stillwater continues to be Oklahoma's 10^th largest city with a steady increase in population according to recently released statistics from the U.S. Census Bureau. Information provided by the Development Services Department indicates new housing starts from January through June, 2003 are remaining steady with 91 new single family residential permits totaling $15,028,410. For the same time period, 10 duplex permits were issued totaling $1,785,000, and 34 commercial permits were issued totaling $5,058,958. Preliminary enrollment projections for the Oklahoma State University campus indicate an addition of several hundred students for the fall, 2003 semester.

Although the statistics above and other economic indicators are providing some optimism for the coming fiscal year, the City of Stillwater is taking a "wait and see" approach for the 2003-04 budget. This is in light of the flat sales tax receipts for the budget year just completed as well as the prior year.

As part of the budget process, each department prepared a 5% reduction contingency plan that would be available if revenues do not keep up with projections. A 5% reduction in most departments would impact the department's ability to maintain service levels. The Finance Department will monitor the city's financial position and make recommendations as to an appropriate course of action. For the first quarter of the budget year, no projects will begin unless specifically authorized.

The budget includes funding for 2003-04 projects from the 5-year financial plan. Also included is funding for completion of projects started in prior fiscal years including airport runway extension (Phase III), renovation of the Community Center west wing, and the wastewater plant upgrade. The budget includes a very limited number of replacement vehicles. This is the second consecutive year of not replacing vehicles which is expected to increase maintenance and operating costs. Funding approved for other capital items classified as discretionary is also very limited.

New personnel approved for this budget year include two maintenance workers to be funded by the Storm Drainage Fund and the expansion of a job sharing position in Human Resources to a full-time position.

Revenue adjustments approved in conjunction with this budget are as follows:

• Increase in fees for permits and licenses issued by the Finance Department. These include: itinerant merchants, solicitors, massage therapists, taxi drivers/operators, alcoholic beverage, and beer.
• Increase in garbage collection rates for both residential and commercial customers. The residential rate is increasing to $12.17 a month for curb side and $17.82 a month for house side collection. Commercial rates are increasing 10.9%, and the street sweeping fee is increasing to $1.50 a month.
• An across the board increase of 2% for all classes of electric utility customers.
• Increase in fees and memberships at Lakeside Golf Course of 5%.

The following budget summaries by department indicate their work plans for the next budget year and adjustments anticipated in response to the current economic conditions.

The City Manager's office will be working closely with the City Commission to set priorities given the limited budget. For the coming year, continued emphasis will be placed on improving organizational processes for greater efficiencies and improved customer service. In General Government, funding is included to continue contracts for service with the Chamber of Commerce for economic development, Sheerar Museum, Downtown Stillwater, and the Community Relations/Fair Housing Council. As in prior years, contingency funds have been set aside for the unexpected.

Information Technology (IT) will continue to pursue its primary goals of supporting, maintaining, and implementing technology that reduces costs, increases performance and productivity, or improves services provided by the city. The projects budgeted for this year meet these goals.

Two of the largest projects are planned upgrades to the city's telephone system and document imaging system. Upgrades to the phone system will provide direct dial extensions and voicemail to many employees who do not have them, and will also allow for calls to be transferred from City Hall to specific extensions in remote departments. The upgrade will also include switching from copper to digital trunk lines which are cheaper, support higher call volumes, provide caller ID functionality and other call features, and provide higher speed dial-up data connections as well. In addition, the upgrade will include redundant switches that can pickup call traffic from one another if one system fails or is taken down for maintenance, and the upgrade will provide the opportunity to save money by using the city's existing data network to carry voice traffic.

Upgrades to the imaging system will include direct integration with the city's municipal management software and will help to reduce storage space required for paper documents, dramatically reduce time required for search and retrieval of vital records, allow access to these vital records from remote locations, and provide the ability to quickly distribute information electronically via fax, e-mail or the web.

IT will also finalize scheduled PC hardware and software upgrades to improve system performance, ensure application compatibility with internal and external users, and provide additional tools and features to simplify tasks. Application training will continue to be provided for software used by city employees to improve their proficiency and make them aware of all available features. This should empower users to find better ways to perform routine tasks.

In addition to these projects, online services will be added providing access to past and present billing and consumption information for utilities and, with approved budget for credit card processing, the ability to pay bills online as well. IT will also release online services for building permits to allow customers to apply for building permits, request inspections, and check the status of scheduled inspections from their web browser.

The City Attorney's office has effected cost savings for books and publications by expanding its use of on-line research services. Travel, training, professional dues, and subscription budgets have been similarly reduced. For 2003-04, the ordinance recodification project will be delayed until mid-year.

The City Attorney's Office is still in a transition mode with the recent hiring of a new City Attorney, so many of this year's goals encompass modifications to office structure and processes. A new assignment tracking program is being implemented as part of this restructuring. It is anticipated that all new litigation will remain in-house. With the increased workload generated by this and the ordinance recodification process, the existing part-time City Prosecutor's position will likely transition into full-time status. 

The Finance Department plans to introduce the acceptance of debit and credit cards for utility payments in 2003-04. The ability to accept debit/credit cards will also allow customers to begin payment over the internet and to have access to their account information such as current amount due, last payment and usage history. The department is also researching the possibility of utilizing purchasing cards to streamline purchasing procedures city-wide. New purchasing procedures are expected to be submitted to the commission for their review in late summer or early fall.

In December 2002, the Public Works and Community Development Departments were combined to create the Development Services Department. The new department's responsibilities include current and long-range land use planning, building code enforcement, geographic information system, forestry, housing, property maintenance, transportation and storm drainage capital improvements, engineering, surveying, traffic signal operations and maintenance, traffic signing and striping, streets and drainage maintenance, and fleet maintenance.

With the combination of the two departments, the Development Services Center was created. The Development Services Center is designed to be a one-stop shop for permitting. All permits associated with the new development or redevelopment of land within the City of Stillwater are issued by the Development Services Center. The Development Services Center also serves as a resource to the general public to provide information about current development projects, requirements for building within the City and existing infrastructure.

In 2003-2004, the Development Services Department will continue with the implementation of the one-half cent sales tax transportation projects. Approximately $3.5 million dollars is budgeted for major street construction projects and residential street repairs. The major projects include Airport Road from Marine Drive to Jardot Street, Jardot Street from 12^th to McElroy Avenue, and 12^th Avenue from Western Road to Adams Street. The capital improvement and storm drainage budgets include approximately $1.5 million dollars for miscellaneous street, sidewalk and storm drainage projects as well as the procurement of a pavement management system that will be used to more cost effectively manage the pavements throughout the city. In addition to the capital projects, approximately $1.3 million dollars will be spent on general street and storm drainage maintenance by the City's in-house street maintenance crews.

The Development Services Department will continue to provide a variety of community development and enhancement services. As part of the Community Development Block Grant program, down payment assistance will be provided to new home buyers, assistance will be available to home owners that need help with rehabilitating older homes and several street and sidewalks will be improved within the CDBG target area. The City Forester will complete an inventory of street trees in a continued effort to enhance the management of our urban forest. The department will also complete the updating of the city's development code, which is intended to enhance the future development of the community.

The Parks, Events and Recreation Department is comprised of eight community service areas. They are: administration, park operations, recreation programs, senior citizens programs, multi arts center, swimming pool, mini bus transportation, and Lake McMurtry.

Staff will focus on infrastructure improvements during the coming budget year by painting, repairing, and focusing on landscaping.

Several committees or task forces have been formed to review long-range planning for facilities and programs. One of the groups is the Investigative Task Force for Senior Programs. This is a group that includes citizens, city staff and OSU gerontology division members. The group distributed a survey last year regarding what Stillwater has to offer as a retirement community. This year the task force will review the information from the survey and establish a list of items for recommendations to various groups serving seniors. The group is working with staff on reviewing the criteria for citizens to qualify for the mini bus transportation program and establishing a community network for information and services related to Stillwater as a retirement community.

Another task force being formed will review the current community walking/biking trails master plan. The current plan is 10 years old and due to improved sidewalks in many areas and a comprehensive street repair plan it is no longer a valid plan. The task force will review the current street repair plan and areas in the community that could benefit from trails connecting to the university, shopping, parks, etc. The city should experience some cost savings by combining trails with street improvement projects where feasible.

Over the last year, staff has become aware of inadequacies in the area of providing accessibility to Stillwater citizens in facilities and programs. A committee will be looking at this issue specifically. Comprised of Park, Events and Recreation staff and board members, members of the Public Relations Committee and individual citizens with a desire to see these services improved the committee will first perform a self evaluation of facilities, programs and services, and develop a plan to implement necessary and feasible improvements.

To continue the emphasis on safety and providing quality experiences for children and families, the department plans to update two playgrounds (Ingham and Strickland), replace a water slide at the pool that was removed, and continue developing the Kameoka Trail from north Boomer to Park View Estates.

Also included for this year is the replacement of a mini bus vehicle. These vehicles transport as many as 40 riders per day and the mechanical aspects experience a lot of use. The replacement will reduce repair time and allow staff to continue to service the riders in a timely manner.

This year will also include several items at the senior center to improve the appearance as well as the amenities for serving the seniors. Items include: landscaping, chairs, tables, ice maker, automatic door opener, and painting outside will make a significant improvement.

Of importance to the Library for this budget year is the implementation of the first year of the Stillwater Public Library's 2003-2006 Long Range Plan which was approved by the Library Board on April 22, 2003 and the City Commission on April 29, 2003. This first year, the Library will add books on CD and DVDs to the audio/visual collection, design and equip the gallery area for hosting social and cultural events, continue to promote the Library through displays, provide Internet and database training to library users, and host programs pertaining to business skills and career information. The Library will also be completing three priorities of the 2002-2004 Technology Plan to develop a successful solution to Internet scheduling issues and provide training for staff and library users of Online Public Access computers, online databases, and Microsoft Office products. Additional goals for this budget year include developing the 2005-2007 Stillwater Public Library Technology Plan, increasing Children's Reference service hours, and continuing to apply for and receive state and federal grants for library services and programs, including e-rate discounts for telecommunications and long distance telephone service.

Fees for overdue library materials are $0.15 per item per day for books, CD music and audio cassettes, $0.25 for Interlibrary Loan materials and $1.10 for video cassettes and CD-ROMs. Meeting room hourly fees are $15.00 for conference rooms, $20.00 for the board room and gallery, and $30.00 for large meeting rooms. Equipment fees are $50.00 for the LCD projector, $12.00 for major equipment and $5.00 for minor equipment. For this budget year, the Library anticipates generating $55,000.00 in revenue from these fees. There are no capital requests for the Library for fiscal year 2003-04.

The budget of the Police Department (which also includes Animal Control and Stillwater Emergency Coordination and Communications Center (SECCC)), was developed with maintenance of current service levels as the final objective. The only capital expenditure for the department is the final year of a multi-year program to change out the outdoor warning sirens.

Of concern in the Police Department is that no replacement patrol vehicles are budgeted. Maintenance costs for these vehicles is a concern; however, the department will experiment with refurbishing one police car to determine if the life of a patrol unit can be significantly extended.

Another concern is that capital projects from 2002/03 were withheld due to a lack of funding. The voter receiver system which was lost to the funding problem would have addressed "dead spots" in the police radio system. A continuing concern is staffing levels in the jail. The municipal jail currently has five full-time employees.

Reorganization of SECCC resulted in a police captain's appointment as director. An emergency management technician will be hired to assist with SECCC programs. In addition, funds to provide for a maintenance program for the outdoor warning sirens were allocated. This program should help address citizen's concerns regarding the ability to hear the warning sirens.

The major goals of the department are as follows:

Police Department:

• Become an accredited agency in this fiscal year;
• Attempt to identify ways to increase efficiency and decrease budgeted spending;
• Determine ways to cooperatively establish effective communication between police department managers and the Fraternal Order of Police.

Animal Control:

• Develop updated standard operating procedures;
• Improve the appearance of the public areas of the shelter;
• Present updated ordinances to the City Commission.

SECCC:

• Provide training to citizens regarding disaster preparedness;
• Meet the training requirements of the Federal Emergency Management Administration and the Oklahoma Department of Civil Emergency Management;
• Conduct at least one functional disaster exercise.

The demand for services from the Fire Department continues to increase at a substantial rate.  Fire related calls increased 20%.  Rural fire calls increased 15%.  Ambulance related calls increased 8%.  A 5,000 call milestone was reached with the total of fire and medical calls reaching 5,174.  Since budget year 1997-98, the number of fire alarms alone has climbed 50.4% without any increase in fire operations personnel.

The Fire Department's Medical Officer position (Medic One) became operational in February 2003.  The position required the promotion of three paramedics, thereby, providing a Medical Officer for each shift.  The Medical Officers provide day-to-day supervision of the delivery of Advanced Life skills to residents, as well as, provide hands-on Paramedic level treatment when necessary. In recent meetings on customer service at Stillwater Medical Center the fire department was praised by the hospital staff and doctors on the quality of patient care.

Two capital items are contained within the Fire Department's budget.  First, is $115,000 dollars for a new ambulance complete with defibrillator  The new E-450 ambulance will replace a smaller E-350 that is not suitable for ALS services.  Second, is $450,000 dollars for the first phase of remodeling of the University Fire Station.  The first phase involves the conversion of the second floor from classroom space into living space for fire personnel.  The University is moving the existing fire protection engineering students into new facilities and will turn the entire building over to the Fire Department.  The funding will allow the installation of a fire sprinkler system and move the living quarters from the ground floor up to the second floor.  The building will be remodeled to handle up to 12 full-time firefighters.  This is a major commitment from the City of Stillwater to Oklahoma State University and the surrounding city residents and will establish a viable fire station location for many years to come.  The remodeling will eventually bring the building into compliance with numerous federal and state standards. The second phase of the remodel is scheduled for next budget year and will involve remodeling the first floor and the old sprinkler lab.  OSU is contributing all of the architectural services for the design and bidding of the remodel.  The estimated value of OSU's services is approximately $40,000 dollars.

Preparing for any acts of terrorism has been a major focus for the Fire Department.  Advanced hazardous materials detection equipment and response suits are now on hand to assist firefighters with responding to incidents.  The Fire Department has 18 Hazardous Materials Technician level personnel and other specialized rescue personnel in high angle rescue, trench rescue, building collapse, and confined space rescue.  The State of Oklahoma considers the Fire Department's Special Operations Team an important component in the State's regional response plan for terrorism or disasters.

The Fire Department is completing the construction and deployment of a new type of foam system for wildland applications.  The Compressed Air Foam system is part of the Fire Department's research and development effort aimed at developing technologies and tactics that will improve the ability to protect dwellings and extinguish wildland fires.  The new system will allow firefighters to spray a protective blanket of thick clinging foam onto a house or building ahead of an approaching fire, thereby, protecting the dwelling from radiant and thermal heat.  The deployment of this equipment was fully funded in the Rural Fire budget and did not impact the General Fund.    

The Community Center was granted approval by the City Commission to accept a $500,000 private grant/donation proposal as presented and authorizing $224,000 of city funds to be used for the Center to upgrade the electrical, heating and air-conditioning systems in the project area of the West Wing and for additional design or architectural/engineering costs. The total budget for the project was $724,000. A multi-use design for community-based activities with an "old school' décor was created in the plans and specifications for the renovation of the West Wing. A structural engineer was contracted to investigate the floor-settling problem in the West Wing and the recommendation was to fill the void space to avoid further settling. On May 19, 2003, the Commission approved the recommendation to award the bid to Henson Construction in the amount of $620,500 base bid. For 2003-04, the goal will be to complete construction and program the space to fully utilize the remodeled portion of the West Wing.

The Community Center Advisory Board presented a strategic plan to the Stillwater City Commission, which is the culmination of an 18-month review of all the previous plans presented to the Commission, numerous studies commissioned from professional design firms, and plans concerning future use of the facility. The plan outlined and made recommendations for the future of the Community Center for Stillwater.

For 2003-04, the Community Center budget provides termite control for the entire building and the purchase of additional 120 stackable chairs to be utilized for room setups. These new chairs will be beneficial to the new multi-purpose room.

The Community Center continues to maintain an aggressive schedule of programming. The programming addresses as many population segments as possible to enhance the cultural experience of the community by providing quality programming in the visual and the performing arts. For 2003-04, a goal of the Center is to implement an annual programming fundraiser to initiate a program subscription series. Annual events are an integral part of the programming plan, which allows the Community Center to broaden the arts and cultural experience to the Community of Stillwater and surrounding areas.

For the Stillwater Regional Airport, this budget year will continue to see project development for airport expansion through the runway extension project. Additionally, improvements made to the air traffic control tower through the addition of the Federal Aviation Administrative (FAA) furnished radar and voice switching equipment will continue to add safety to the airways around Stillwater Regional Airport.

The airport is expecting an FAA Airport Improvement Program grant in support of Phase III of the runway extension project prior to the close of the FAA FY 2003. Phase III involves the paving, marking, lighting, instrument approach equipment relocation, installation of the approach light system, construction of paved shoulders, and relocation of the runway distance to go signs. Construction on the final phase of the extension project is anticipated to begin in December of 2003.

Air traffic control services began in April of 2002 and provide a safe and efficient flow of traffic in and out of the airport. Air traffic control services are provided through an agreement with the FAA Contract Tower office in Washington DC. The federal Cost/Share program is funded in part by an FAA Grant, with the local share being determined by a benefit cost calculation conducted by the FAA Contract Tower office. Stillwater Airport is one of six airports in the state of Oklahoma participating in the FAA Contract Tower Program.

Additional emphasis will be placed on economic development through recruitment of additional businesses or industries to locate on airport property. Airport staff will continue to focus on revenue development, cost control and increased efficiency of operation of the airport.

Lakeside Golf Course continues to provide the city and community with "one of the best municipal courses in the state". A 5% rate increase in the fees will assist the course to break even for the year, excluding the annual debt payment for renovation.

To more accurately determine the budget, the golf course will begin leasing its fleet of maintenance equipment for 2003-04. The expansion of the cart paths and bridges on hole numbers eight and nine are planned. Replacement of tin on the cart shed roof and sides will be completed. The beautification of the appearance (clearing and planting) of the course along Highway 177 continues to progress.

For Stillwater Power (SP), this fiscal year will be the second year of a two-year project to overhaul the two turbine generator units at Boomer Lake Station power plant. Overhaul of Unit #1 was completed in June, 2003 and work on Unit #2 will start in October. That unit will be overhauled at a budgeted price of $100,000. These major overhaul projects are conducted on a five-year cycle. Their intent is to find and correct any problems in the turbine generator systems so that the units will operate correctly when needed by SP.

Additional generating and substation division work will include the replacement of two additional substation breakers for $50,000. The breakers being replaced are over 40 years old and replacement parts are no longer available. The new breakers will increase the reliability of the electric system by replacing outdated equipment with current units.

Funds budgeted for electric system extensions to new customers for the next year total $375,000. This includes both underground and overhead primary and secondary extensions for new customers.

SP plans to rebuild the underground residential distribution system in the Parkview Estates area this next fiscal year. This $385,000 rebuild project is the next one in an on-going series to reconstruct neighborhood underground systems that were installed early in the underground history of this utility. The older sections of the system feeding this subdivision are now 30 years old.

SP will be removing and replacing old primary conductor wire and old transformers during this project. The upgrade to modern wire will extend the life of the system for another 30 years and eliminate conductor that is beyond its useful life. Based upon previous experience in other subdivisions, this type of conductor will become the source of outages very soon and SP hopes to avoid the inconvenience and frustration that needless outages cause its customers. Some of the transformers in this area are also deteriorating and will also be replaced with new units during this project to avoid future outages.

For 2003-04, $18,000 has been allocated for the Subdivision Incentive Policy and $15,000 for the Customer Rebates. The latter item is a program to help fund heat pumps and electric water heaters in residential construction in an effort to increase Stillwater Power's winter electric sales.

For the Technology and Research Park, Stillwater Power has included $30,000 to be added to the carry-over budget for work in the park. These funds will be used for street lighting on the extended portion of Innovation Way that was completed last year. That section of the roadway is presently unlighted. With the addition of a second building and new tenants in this park, additional roadway lighting is needed for safety reasons.

Other carry-over items include funding for equipment relocations for the Lakeview Road move project between Washington and Western and for the Highway 177 widening south of Stillwater.

Ongoing projects include the installation of a 2 MW diesel generator at the Water Treatment Plant and the installation of three, 2 MW generators at the Boomer Lake Station generation plant. This added capacity should be on line and operational by the 2004 summer season. The added capacity will save SP approximately $400,000 per year in power costs.

Most of the above items are also included in the department's goals for this year. Funding for other items that were listed as goals was cut in the general removal of discretionary items from the basic budget.

The 2003-2004 budget year provides an opportunity to complete several major milestones for Water Utilities (WU). The first includes finalizing water purchase and production contracts with Oklahoma State University and the City of Perkins. At the time of this writing, contracts were being finalized for the sale of treated water and/or excess treatment capacity for both of these entities. It is estimated that each of these agreements will be complete by the end of September 2003. The completion of these agreements will allow the WU to advance an ongoing goal to expand its regional water system. The expansion of this system will allow for the water system to be optimized to provide the most efficient and cost effective water service to all citizens, customers and end-users.

The second milestone anticipated this fiscal year is the completion of the Wastewater Plant Upgrade and Expansion Project. The construction phase is approximately 91% complete by cost and is scheduled for completion in May 2004. The new treatment process was placed into service in November 2002, at which time all Federal and State regulations were and have been met. The Stillwater Community's needs in this area will be met through the next 20-year planning horizon (2025), based on current and foreseeable future growth trends and regulatory requirements.

Finally, the WU is finalizing process improvement efforts department wide that allow for a more efficient and effective delivery of all WU services. The upgrade of water and wastewater treatment facilities supports the reassignment of four full-time equivalent (FTE) positions within the department to provide a more reliable, effective and efficient service delivery. Work processes within the WU have been reviewed to determine the most efficient use of resources for water utility operations.

Commission Directives: During the budget review, City Commissioners indicated a desire for additional study on several items including development of detailed budget reduction plan for implementation if economic conditions warrant, planning for a new fleet maintenance facility, golf course loan, the mini bus program, sanitation services, staffing for Senior Center and Multi Arts Center, Lake McMurtry road repair plan, Community Center, economic development incentives, and development of more meaningful and up-to-date departmental workload statistics.

Special appreciation goes to the many staff members helping to prepare the budget as well as to the City Commission for their time and efforts. The Finance Department deserves special recognition for preparing an incredible amount of financial information utilized in the decision-making process. It is with great pride that I extend a special thanks to Assistant City Manager Mary Rupp. While the budget message is typically a responsibility of the city manager, Mary stepped in to facilitate the budget development process while the city manager's position was vacant. Credit for the budget and this overview are to be given to Mary.

This budget document provides a wealth of information about the 2003-04 work plan for the City of Stillwater. We hope that citizens will take advantage of its availability to learn about the programs and services of the community in which they live.

Respectfully submitted,