PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH
MONDAY, JUNE 6, 1983
THE CITY COUNCIL OF SALT LAKE CITY, UTAH, MET IN SPECIAL SESSION ON MONDAY, JUNE 6, 1983, AT 5:00 P.M. IN ROOM 211 CITY AND COUNTY BUILDING.
ON ROLL CALL THE FOLLOWING COUNCIL MEMBERS WERE PRESENT: RONALD J. WHITEHEAD ALICE SHEARER GRANT MABEY IONE M. DAVIS SYDNEY R. FONNESBECK EDWARD W. PARKER PALMER DEPAULIS.
Council Chairman Grant Mabey presided at and conducted this meeting.
Mayor Ted L. Wilson, Albert Haines, chief administrative officer, and Roger Cutler, city attorney, were present at this meeting.
The press was notified of this meeting by a copy of the Council agenda which was posted in the press room at least 24 hours prior to the meeting. The following members of the press were present: Rod Arquette, Channel 2 News, Dave Schneider, Deseret News.
COUNCIL BUSINESS
Salt Lake City Budget Fiscal Year 1983-84.
Mayor Wilson said that he would be making a recommendation to the Council regarding the problems of the flood and costs, which have not yet been determined. The Mayor said that they would not know the state sharing formula until the legislature meets and based on this the Mayor recommended that the 1.47 mills for the disaster fund be increased to 2.75 mills. This would provide a minimum amount of money to be used as a match for the federal and state help. The Mayor did not know if this amount would be adequate depending on the final costs of the flood and indicated that another request may be made at a later time.
Mayor Wilson said that FEMA (Federal Emergency Management Agency) would carefully monitor the money they match and he was certain that they would not allow the City to supplant the general fund budget. Only incidental costs would be allowed such as overtime. The Mayor said that his recommendation was also an attempt to increase the emergency fund. Mayor Wilson said that he was asking the Governor to recommend to the legislature that they extend the date when the mill levy has to be set since the costs of the flooding disaster are not known at this time.
The Mayor said that the Jordan River still had to be contained and then the cleanup work had to be done. Councilmember Davis asked the Mayor if he was taking into consideration the fact that the county was raising property tax by 1 mill. The Mayor said that he was aware of this but as a result of the flood there will be costs which the City has to bear. Some of the damaged areas belong to the state and the county but other areas will be the responsibility of the City. Councilmember Parker expressed concern about how the increase would affect the businessmen in the community. Mayor Wilson said that he met with the Chamber of Commerce executive board and they have passed a resolution supporting the 2.75 mills for the emergency fund and .95 mills for salary purposes. Councilmember Whitehead suggested that the funding for the flood be considered separately so the mill levy could be set on schedule. The Mayor said that he recommended funding the entire amount at this time so that the reserve fund could be maintained. If City cash is used without a budgeted amount to replenish the funds then during the year the average amount of funds for investment purposes will decrease and the revenue projection will be hurt.
Councilmember Whitehead asked how soon the City could be reimbursed by FEMA. The Mayor said that he did not have the answer at this point. Mr. Haines said that if the cash flows are drawn down then the interest projection will not materialize or will be much less. The City has already drawn down below zero in terms of projected fund balance. Mr. Haines also said that he did not know if all of the decisions and expenditures made in terms of the flood would be eligible for FEMA funds.
Mayor Wilson said that his recommendation includes trying to increase the level of fund balance as well as having money to match federal funds. The original recommendation of 1.47 has been increased because it includes two areas: potential match money and trying to get the fund balance to a reasonable level. Councilmember Shearer asked the amount of funds that would be allocated to each area. Mayor Wilson said that at this point the money will remain in a lump sum because the allocation will not be known until the end of the flood, until there is a formula from the state as to matching levels, and until a determination has been made as to what expenditures are eligible by FEMA.
Mayor Wilson said that he recommended 2.75 because assuming a reasonable match is received from the federal government and the state for the current expenditures then the 2.75 would bring fund balance close to $2.5 million which is the maximum allowed on the emergency fund. This is assuming that the state and federal government will match a large amount of what has already been spent, if not then less will be assigned to the reserve portion. Councilmember Shearer indicated that if FEMA reimburses current expenditures from fund balance then, under the Mayors’ plan, the fund will be too high and money will have to be spent.
Mr. Haines said that would be the case if the fund balance was at zero but currently the fund balance is below zero. Councilmember Shearer said she understood that when the City is reimbursed by FEMA then the various funds from which money was barrowed are reimbursed first and the fund balance is reimbursed last. If any money is paid into the fund balance then that fund will be over the maximum because the 2.75 will bring the fund to the maximum level. Mr. Cutler said that the money would be appropriated into the next year’s budget and the mill levy could be reduced. Mayor Wilson said that one of the conditions of the Chamber’s endorsement was that the City consider this increase a disaster fund and all reasonable attempts be made next year to eliminate or reduce the increase pending future emergencies. The Mayor said that the City was not trying to gain anything from the increase other than a healthy fund balance and providing money for matching purposes.
Councilmember Fonnesbeck asked about the long-term costs. The Mayor said that a lot of those costs would be reimbursable but jurisdiction of those damaged areas has to be determined. The Mayor hoped that the long-term costs would be assisted by state and federal aid but City citizens will also have to bear some of the burden and this may require a bond election. Councilmember Whitehead expressed his concern that the state and the county would also raise taxes because of the flood. The Mayor reiterated that the state and county have jurisdiction over some of the damaged areas of the City but other areas are strictly the responsibility of the City. Mr. Haines said that this recommendation dealt with the issue of maintaining the budget.
Mr. Haines said that the 2.75 mills and the revenue it generates goes into an unappropriated fund balance which cannot be spent and which is controlled by the Council. Councilmember Shearer said that if the money is put into fund balance then it will not be available for matching. Mr. Haines said the budget would have to be opened and an emergency declared. Councilmember Whitehead suggested that the money be put into the contingency fund and then appropriated where needed. Mr. Haines said that the bond rating would be jeopardized because the money would be easily accessible for other purposes.
Mayor Wilson said that the people who rate cities are comfortable with funds set aside for emergencies so cities can cover unforeseen situations; ratings are issued on these comfort factors. Fund balance makes money available for emergencies so the bond holders are not jeopardized. The bond raters want this money to be insulated. Councilmember Shearer said that the money has always been at the discretion of the Council because an emergency can be declared by five Council votes. Mr. Cutler said that an emergency is considered to be an act of God and there are parameters as to what is considered to be an emergency. The Mayor made a strong recommendation to put the 2.75 into the reserve fund and not a contingency fund.
Councilmember Parker moved and Councilmember Whitehead seconded to go into executive session to discuss items relating to labor negotiations, which motion carried, all members voting aye except Councilmembers Davis and Shearer who voted nay.
The Council closed the meeting to the press by the 5 to 2 vote in favor of meeting in executive session. The Council, Mayor, Chief Administrative Officer, and department heads then discussed employee compensation issues as they relate to the budget and collective bargaining agreements.
(B 83-2)
The meeting adjourned at 7:30 p.m.