DATE: November 23rd, 2016
TO: City Council, Mayor, Staff and Community Members
FROM: Mary Garness, City Administrator
RE: Winter Quarterly Briefing
Dear Mayor Lewis, Members of the Common Council and Community:
It is my pleasure to present to the Council and the residents of Ashland the 2017 Budget. This budget reflects the cumulative efforts of City staff and elected officials to enhance Ashland’s quality of life through the provision of effective and efficient services.
Several factors have made the development of the 2017 Budget a challenge, notably State of Wisconsin imposed levy limit caps, expenditure restraint requirements, restrictions on the creation of new user fees, and state shared revenue and general transportation aid cuts. If any consolation, the City of Ashland is not alone in having to weather financially challenging times. The financial stress has been a daunting challenge; however, the City of Ashland is adapting to the financial constraints that have been imposed. The City is adapting by helping stakeholders understand the seriousness of our financial challenges and avoiding short‐term coping responses (such as deferred maintenance, “rosy‐ scenario” budgeting that underestimates costs and/or overestimates revenues) as much as reasonably possible. Short‐term approaches to managing budgetary challenges can be tempting; however, long‐ term fiscal health requires long‐term planning.
In order to address the fiscal challenges ahead, the City will need to continually focus efforts on generation and evaluation of potential solutions, choosing the ones that improve rather than degrade adaptation and the long‐term sustainability of public service needs desired by the community. Some of the recent efforts that have been pursued to address the fiscal challenges ahead include: 1) development of a 5‐year forecasting model that allows the City to forecast and manage economic conditions; 2) adoption of a financial plan that provides strategies for responsible utilization of debt; 3) development of infrastructure master plans for the City’s major transportation and water and wastewater utilities; 4) adoption of a 5‐year Strategic Plan to focus efforts; 5) re‐organization of City departments to ensure efficiency and effectiveness of City operations; and 6) focused pursuit of grant opportunities to fund infrastructure and amenity projects; 7) identification of best practices and opportunities for process improvement and automation across all City departments; 8) exploration of alternative revenue options; and 9) focused efforts to encourage investment in the community. The aforementioned strategies will continue to be developed and integrated into the City’s long‐term financial management strategy.
TRENDS AND CITY EFFORTS
Even with some financial stress, the City has continued to have a constant focus on effective resource use and being creative, flexible and adaptable. The City has never stopped moving forward or exceeding expectations for producing high quality work. Some of the efforts the City will take on 2017 include the following:
- Implementation of the updated Comprehensive Plan;
- Ore Dock Revitalization Project;
- Encouragement of and support of development efforts;
- Technology upgrades to ensure ease of access to the City’s information systems;
- Continued monitoring and enforcement of ordinances and statutes that work towards improving current and future housing conditions;
- Market City owned properties for redevelopment purposes and continue efforts to sell City properties including the Timeless Timber Site, Junction Road Site, Fire Stations and other properties of the City;
- Offer and recommend changes to the City’s UDO to encourage equitable, innovative, business friendly practices;
- Promote the use of new technology, online portals, and social media to improve the delivery of services to internal and external customers;
- Development of a sustainable a 5‐year CIP for public works related infrastructure projects and water and wastewater utility infrastructure;
- Development of a safety training plan and protocol for City to ensure coordination of effort and compliance with safety and legal requirements;
- Review and recommend improvements to ordinances that are outdated and/or cannot be enforced due to limited staffing and/or resources (sidewalk snow removal, storm water ordinances, unified development ordinance, etc.);
- Development of a comprehensive grant program that will focus efforts enabling the City to compete for federal and state grants.
Revenue Generation and Cost Recovery Efforts
It is the goal of the City to recover the costs of providing services whenever practicable. Recovery of costs through fees or charges helps offset the requirement of tax increases for sustaining municipal services. The City’s cost recovery initiatives appropriately charge the user group benefiting from a service instead of the community at large. It is never the intent or goal of the City to generate excess revenues. The City’s intent when charging taxes, fees and other charges for services is to recover the costs of providing the service in a fair and equitable manner.
The primary sources of revenue for the City of Ashland are property taxes together with state shared revenues and other fees for services. As those revenue streams shrink and become less predictable, like many other communities, the City will explore opportunities to diversify income streams through the use of alternative revenue sources allowed by the Wisconsin Legislature. At the same time, the City must also consider how it delivers and funds services to its residents as tolerance for tax and fee increases is limited.
The Wisconsin Legislature, in an effort to limit property taxes, capped the rate of growth of a municipal levy to net new growth which is the primary source of revenue for the City of Ashland. The restrictions imposed by the legislature leave few options in generating new revenues to cover increased costs related to increased demand for services and escalating costs due to deferred maintenance on equipment and infrastructure. While options are limited and require hard choices from the City’s governing body, they should still be considered as possible viable options.
Economic Development Efforts
The City of Ashland will continue its efforts to provide an environment in which public and private‐ sector jobs can be created and maintained. Because the City is the intersecting point through which most business creation must flow, it is understood that regulation and administration must be supportive and transparent. Further, regulation must also be consistent with the character of the community.
To position itself appropriately, the City of Ashland will continue its efforts in creating a realistic economic development strategy with the culmination of the updated Comprehensive Plan of record. The Comprehensive Plan will serve as a guideline that promotes the specific strengths and wants of the community. Priorities identified by the community during the City’s Authentic Ashland Comprehensive Plan update are as follows:
- Make Downtown Ashland great by focusing public and private investment in downtown;
- Protect and connect the lake through linkage of people to Lake Superior;
- Knit the urban fabric together by making the City as welcoming, walkable and cohesive as possible;
- Strengthen the housing market through focused efforts;
- Promotion of place‐based economic development;
- Set a strong example of sustainability to support the City’s priorities and to burnish Ashland’s image as a place that is innovative and environmentally mindful.
The City will be focusing efforts in 2017 to implement the Authentic Ashland Comprehensive Plan. Implementation will include updates to the City’s zoning and unified development ordinances as well as focused efforts on priorities identified during the process.
The City of Ashland has invested over $50 million in street, utility, and facility improvements over the last decade via a substantial number of grants and earmarks the City was blessed to receive. With changes in national fiscal policy and changes in the state’s legislative and congressional delegations, those opportunities have declined; however, the City of Ashland continues to apply for and receive grants through focused efforts to capitalize on opportunities that will have the best possibility of success. Two recent projects substantially completed in 2016, 6th Street West and 7th Street East Reconstruction Projects, were funded primarily with grants funds received by the federal and state government.
With the combined efforts of City Council members and City Department Heads, a draft Strategic Plan was developed during the July 2015 Council Retreat. A Strategic Plan Committee was then formed to revise, review and prepare the Strategic Plan for presentation to Council for adoption. The Strategic Plan was adopted by the City Council on September 29, 2015 and reconfirmed at a July 2016 Council Retreat. The development of strategies to assist in attaining the goals of the plan continues and will be revised as goals are met. A summary of the Strategic Priorities follows:
City of Ashland Strategic Priorities 2016 – 2020:
- Facility Improvements to City Hall, Police, and Vaughn Public Library
- Housing Infrastructure Improvements
- Development of a Sustainable Infrastructure Improvement Plan
- Economic Development and Marketing Strategic Plan Development and Implementation
The City will focus efforts on strategic priorities of the City by budgeting resources to ensure that we continue to move forward and make progress on these priorities. In fact, many of the initiatives that will be pursued by the City in 2017 fall into the aforementioned priorities.
One of the goals of the City is to continue to identify ways to utilize our resources in a more efficient manner thus reducing our operating overhead while maintaining the level of service desired by our citizens. In order to meet these challenges, a process called Priority Based Budgeting (PBB) was used to develop the 2017 Budget. This process was used to assist the City in allocating scare resources and aligning those resources with the City’s strategic goals.
This approach to budgeting allows the City to allocate scare resources to programs that are: 1) required by law; 2) provide revenue generation; 3) provide services to a large part of the community; 4) are not able to be offered by the private sector; 5) and are Council and community priorities. Further, PBB will help the City of Ashland accomplish the following:
- Engage in strategic decision‐making regarding funding for services and/or changes in service levels for current programs and services.
- Provide a program level understanding of “how much it costs” to provide programs and to allow for an understanding of what options the City has, in prioritization of programs.
- Answer questions such as: “Can we do this program more efficiently?” or “Are we the best source to provide this service?” or “Are we recovering the costs for providing the service for both direct and indirect costs?”
- Most importantly, PBB will help the community, Council and City employees understand the City’s use of its limited resources.
- This method of budgeting will assist in contributing to the City of Ashland’s goal of long‐ term financial sustainability.
Some of the major end results of the Priority Based Budget Process are outlined as follows:
Community and Economic Development
The City of Ashland is very hopeful that the recent trends in development will continue. In fact, given the inquiries the City has received, we truly believe growth will continue. We do know that any effort to stabilize and grow the City’s tax base will only have a positive impact on the future. Therefore, this budget proposal includes support of the following efforts:
- Creation of a new Tax Incremental District to support development efforts in the City’s core downtown;
- Efforts to redevelop the Timeless Timber property through use of TIF Dollars;
- Marketing of City properties in the Industrial Park;
- Marketing of other City properties for re‐development purposes and addition to tax base;
- Re‐development of the Ore Dock base;
- Partnership with Ashland Area Development Corporation and the Ashland Area Chamber of Commerce;
- Implementation of the City’s Comprehensive Plan.
- Taxes – Overall, this budget includes an increase in levy‐related expenditures of $51,618 resulting in an overall increase of 1.30%. City and state imposed levy restrictions are met by this budget.
- Debt and Fund Balances – Despite the difficulties in balancing the budget, the Debt and Fund Balance policies that we have put in place will be met by this budget to ensure the City’s outstanding bond ratings and financial stability. The City will need to be cautious in utilization of fund balance available as contingencies are not built in for volatility of state aid changes, utility increases and fuel costs.
At the direction of the City Administrator, several departments of the City have explored and will continue to explore restructuring. Given the recent changes in several departments of the City, and budgetary constraints that the City anticipates, the City Administrator, with the assistance of affected departments, will continue to explore restructuring of City departments whenever possible. The Common Council recently approved major changes in the following departments: Buildings and Grounds, Finance, Parks, Personnel, and Public Works.
The following reorganizational goals have been established and are considered the end goals of the City’s re‐organization processes:
- Spread workload within departments in a way that is equitable and manageable for all;
- Normalizes salary levels internally as much as possible while remaining within financial limitations;
- Considers internal control deficiencies and allocation of duties to ensure enhanced internal control procedures and increased assurances that not one individual has too much control of finance related functions;
- Consideration of current skill sets and utilization of staff based on interests;
- Utilization of technology to streamline processes and procedures;
- Provide an opportunity for current staff advancement and skill set development;
- Prioritizes the need and importance of developing a long‐term human resource and safety management program that serves the needs of a diverse workforce and minimizes workplace injury while maximizing the City’s wellness program;
- Utilization of interns or work study students to assist with various department related functions providing for a key opportunity for the City to further develop current partnerships with local colleges and develop future public employees.
In the age of a shrinking workforce, the City recognizes the need to retain and attract knowledgeable staff. To that end, the City will be providing 1.5% pay increases for all City staff.
Capital Improvement Program (CIP)
In order to focus efforts on the strategic priorities of the City and continue to address infrastructure and facilities deferred maintenance, the City will be working towards completion of the following projects in 2017 and 2018:
- Police Department facility improvements ($186,960);
- Prentice Park ‐ garage roof ($18,000);
- Vaughn Public Library – 3rd floor carpet replacement ($10,000);
- City Hall tuck pointing and window replacement ($100,000);
- Public Works building air quality improvements ($12,000);
- Salt Storage Structure ($95,000);
- City hall lead abatement ($150,000);
- Computerized maintenance management system ($30,000);
- Computerized permitting and licensing management system ($35,000);
- Technology upgrades ($50,000);
- Private lead lateral replacement program ($300,000);
- Public Works ‐ bucket truck, snow patrol truck, grader for alleys, and other equipment
- improvements ($363,000);
- Ambulance replacement ($225,000);
- Police patrol vehicle replacement ($39,000);
- Storm water improvements ($75,000);
- Maple Lane – mill and overlay ($225,000);
- Street Improvements – mill and overlay ($200,000);
- Bayview Park Pier ($445,000);
- Kreher Park – restroom/shower renovation ($120,000);
- Maslowski Beach water quality improvements and beach redesign ($175,000);
- Kreher Park road improvements ($50,000);
- Superfund site development design and engineering services ($50,000).
It is important to note that the private lead lateral replacement program, replacement of an ambulance, Maslowski Beach water quality improvement, and Bayview Pier Project will be primarily funded through grant dollars. Total grants expected in 2017 are over $1,045,000 for capital improvements alone.
In light of all of the challenges that the City faces, it is important to remember that the one thing that doesn’t change is the City’s mission of meeting the needs of the community and enhancing the quality of life. This means that we must continue to find ways to be more efficient with the resources that our citizens entrust to us and to look for ways to permanently reduce our overhead while minimizing the impact on the services that our citizens have come to expect from the City.
The City of Ashland continues to balance sound financial conditions with providing the essential needs of our City despite challenges faced in the local, state and national economy. Together we will continue our dedication to meet the needs of the community and enhance the quality of life. The City of Ashland is a viable, strong community that can weather financially stressful times.
I’d like to take this opportunity to thank all City department heads and their staff for their work on this budget. I thank staff for working hard to keep the best interests of the City in mind, sometimes in spite of their own department’s wants and desires. They deserve a great deal of credit for the jobs they do on a daily basis on behalf of our community.
Also, I would like to thank the City Council for their leadership and the commitment they continue to exhibit in ensuring that the City of Ashland enhances and maintains its diversity and prosperity, safety and livability of the community, the effectiveness and sustainability of government, and excellent quality of life.