«Also Present: Mayor Sutherland, Finance Director Presley, Councilwoman Lieske, Councilman Pohlkamp, Councilman Miller, Police Chief Wright, Detective ...»
FINANCE COMMITTEE MEETING
held February 13, 2012
Present: Councilman Dwight Clark
Councilman Dave Tadych
Absent: Chairman Mike Young
Also Present: Mayor Sutherland, Finance Director Presley, Councilwoman Lieske,
Councilman Pohlkamp, Councilman Miller, Police Chief Wright,
Detective Mark Spaetzel, Detective Jay Elish, Service Director Galli,
Operations Manager Landers
Audience: Bruce Geiselman, Nancy Brown, Kent Silverberg, Jerrie Barnett Mr. Clark called the meeting to order at 6:30 p.m. Mr. Clark explained that Mr. Young was called out of the city for business purposes and has asked Mr. Clark and Mr. Tadych to conduct tonight’s meeting.
Mr. Clark provided a quick summary of where the 2012 Budget process stood last week:
February 3 rendition of the 2012 budget reflected a suggested $300,000 deficit. Based on changes that will be reviewed this evening with Finance Director Presley, this week’s run based on posted changes takes the deficit down to approximately $36,000.
Mr. Clark expressed appreciation for everyone’s input in this long process of balancing the budget. The singular goal for February 27, 2012, which is the next Council meeting following tonight’s meeting, is to present a balanced budget for the 2012 year on first reading.
Mr. Clark turned the meeting over to Finance Director Presley to review changes highlighted and agreed upon last week as part of the February 6 Finance Committee meeting.
Mr. Presley stated that one of the largest adjustments discussed was a change in the allocation of the receipts of municipal income tax. On tonight’s special Council meeting agenda, there is an ordinance to change, on March 1, 2012, that allocation from 94% to the General Fund, 4% to the Equipment Replacement Fund, and 2% to the Accrued Benefits Fund is amended to 96% to the General Fund, 2% to the Equipment Replacement Fund, and 2% to the Accrued Benefits Fund.
The result of that adjustment is that $89,612.00 as a budget number will be put into the General Fund as previously was budgeted in Equipment Replacement Fund. Adversely, $89,612.00 will come out of the Equipment Replacement Fund.
Minutes of a Meeting of Finance Committee February 13, 2012 Mr. Clark asked if the $89,612.00 projects municipal income tax revenue for ten months of the year. Mr. Presley stated that he went a little further. He actually took the allocation from 2011 and looked at what the city would have gotten from March 1, and took those dollars. The $89,612.00 is the allocation based on the 2011 numbers, and what was paid in through the months of March through December, of 2011.
Mr. Clark stated that the ordinance that will be presented tonight will indicate that this will be a temporary move that will be in effect for the balance of 2012. The ordinance has been written that the percentages will automatically revert back to the 94/4/2 percent allocation on January 1, 2013.
Mr. Tadych stated that when using the 2011 numbers, if the 2012 collections should come in a little higher, the $89,612.00 number could, indeed, change to a higher number. Mr. Presley agreed.
Mr. Clark stated that this measure to firm up the budget will be at the expense of acquiring some equipment and/or vehicles and this will be something we will want to be able to talk through with each of the directors when the budget is presented on February 27, 2012.
Mr. Presley stated that the other large adjustment is the posting of transfers from the Accrued Benefits Fund and the Workers Compensation Fund. Thirty thousand dollars from each of those funds is being transferred into the General Fund.
An additional adjustment is the removal of the school crossing guards from the budget effective June 30, 2012, the end of the 2011-2012 school year. The Law Director and the Mayor are at the Board of Education meeting this evening letting them know of that change. Mr. Clark noted that the plan would be to transfer that expense over to the schools for the beginning of their school year, or July 1. Mr. Tadych asked what would happen in the following year. Mr. Presley stated that if the economics should pick up this could be something that the city would bring back, or at least talk to the Board of Education if we wanted to go to a 50/50 cost sharing in the future. Mr.
Clark noted that the school board would have to vote on this and it is still a work in process.
A further adjustment to the 2012 Budget is a change in the hospitalization expense based on the administrative individuals who are paying the increase in the premium on the monthly basis.
This reduced the General Fund expenses by almost $27,500.00.
A reduction in the transfers to the Parks and Recreation Account has been made in the amount of $20,000 after tweaking some of their budget numbers.
Police wages have been reduced by $50,510 based on information received last week as far as an individual who is resigning.
Seasonal wages in Police have been reduced by $32,750.00 which represents the school crossing guards for a six month period.
Minutes of a Meeting of Finance Committee February 13, 2012 An increase in Police Pension represents a review by Mr. Presley of the revenue in the Police Pension Fund versus the expense in the General Fund which indicated that the figures were off balance. Mr. Presley stated that he did not catch that previously. He did recalculate the expense in the Police Pension Fund and it actually reduced the amount of the transfer between funds but still represented a $15,000 increase in the General Fund.
The net items bring the budget down to the $36,000 rounded that Mr. Clark referenced that expenses exceed revenues prior to taking into account the January 1, 2012 fund balance. It would be forecast at this point that the ending fund balance would be just under $498,000.
Mr. Presley stated that he is comfortable with the $498,000 balance with the caveat that we all have to then, even more so, keep an eye to make sure that our revenues are where they are being projected and know that we cannot have expenses above what is budgeted.
Mr. Clark asked, historically, what number Mr. Presley is comfortable with carrying over to January 1. Mr. Presley stated that he would be more comfortable with carry-over of $600,000 at the end of the year.
Mr. Clark stated that the transfer to Parks and Recreation has been reduced by approximately $42,000. He asked Mr. Presley to highlight those reductions. Mr. Presley stated that the Recreation Director has received requests from people who coach basketball teams to rent gymnasium facilities. A line item of $7,500 has been included as an increase in revenue for the renting out of the Community Gym. Another item is that their health care costs have been reduced because one of the individuals who was covered by health care dropped and went to a spouse’s health care plan. The operating expenses out of the Parks Department have also been reviewed which enabled the reduction of the transfer out of the General Fund to the Parks and Recreation Fund.
Mr. Presley continued, stating that as mentioned previously the Equipment Replacement Fund revenue has been reduced because of the reallocation of municipal income tax funds, the expenses in the Police Pension Fund have been changed because of the amount transferred from the General Fund which reduced the expenses by $9,300. Accrued Benefits Fund shows the $30,000 transfer to the General Fund. The Hospitalization Fund amount was decreased by the transfers that reduced various funds but increased by the contributions by administrative individuals and the Workers Compensation Fund shows expense increase by $30,000 to reflect the transfer to the General Fund.
Looking at all the fund balances at year end, the Street Construction, Maintenance and Repair Fund is still a concern because we are still using about 50% of the fund balance in 2012 even though there is a significant increase of the transfer out of the General Fund. Mr. Clark stated that this is the $365,000 figure that was up from $175,000 in the past so that we do not go below zero in the fund but also recognize that we may have to forego some potential projects this next year, possibly. Mr. Presley stated that if we do not do road resurfacings we do not issue debt.
We certainly do not want to issue debt just to do the street striping and the normal maintenance.
What has happened over the past three to five years is that as the economy has turned and there is less fuel use and license plate registrations to fund the revenue. The only way to make up the revenue is a transfer from the General Fund. Mr. Tadych stated that if he remembers correctly Minutes of a Meeting of Finance Committee February 13, 2012 the license plate registration permissive fee is at the peak of what is permitted. Mr. Presley stated that it cannot be increased.
Mr. Clark stated that the $365,000 represents normal maintenance on the striping and pot hole repair, and other normal maintenance that helps extend the life of the roads. If there were a higher balance in the account, it would not require as much of a transfer from the General Fund.
Mr. Pohlkamp stated that he spoke with Service Director Galli regarding the mill and overlay program scheduled for 2012. The bulk of that is going to be the Huntington Woods area, which we have put off for about four years now. Mr. Pohlkamp stated that there may be some other options. There is about $100,000 allocated which includes Donald Street and city parking lots, including the one across from the post office and the parking lot at Columbia Park. Mr. Galli stated that the other city parking lots need to be gone through for areas that need to be repaired.
Mr. Pohlkamp noted that the Ohio Department of Transportation (ODOT) has pulled back considerably so we should get very good pricing on asphalt this year. He suggested withholding one or two of the items until we see how the bids come in.
Mr. Presley stated that if the total street projects Service Director Galli is proposing come in at a lesser amount he would only issue debt for the lesser amount of the bid. Mr. Clark stated that we continue to be open to ideas to reduce the budget.
Mr. Clark stated that on the Hospitalization expense the $27,000 looks like that the members of the administration that have stepped up and increased contributions to health care premiums represents about $1,500 per year for coverage. Mr. Presley stated that the $1,500 per year is the figure he uses for all employees in the program, not identifying between family or single coverage for this purpose. Mr. Presley explained further that he did not break out the specific between the family enrollee and single enrollee. He took the total savings as it would be for the entire population of the city and divided that by the number of people enrolled. It is $1,510.00 on average, and that is the number he used as a reduction factor for health care expenses.
Mr. Clark stated that he has not seen the January, 2012 variance report. He asked if that will be coming soon. Mr. Presley stated that without a budget there is no variance. The variance report is actually the expenses because the budget has not been adopted. When the budget is adopted in March there will be variance reports. Mr. Clark asked if it would not be created through the actual expenses versus what was appropriated for the month through the temporary appropriation. Mr. Presley stated that the detail is not yet loaded. Mr. Clark stated that this is something we were missing at the fourth quarter last year and this is something we need to use to gauge negative variances on overtime and things such as health care and trash collection. Mr.
Presley stated that as soon as the budget is adopted he will load it in and get a variance report out.
Mr. Clark stated that one of the things discussed was the possibility of putting line items in for DARE, Safety Town and Community Diversion. One of the challenges we all see at this time is trying to balance the budget without compromising the safety forces and keep those programs so this will continue to be a work in process until the budget is finalized. Mr. Clark stated that it is City Council’s unanimous belief that we want to support those programs and keep those Minutes of a Meeting of Finance Committee February 13, 2012 programs intact. The Council will have to work with the Police Chief and everyone involved to make that happen.
Mr. Presley stated that he did indicate to Mr. Young that the DARE Fund is already established to account for the grant money that comes in. That will be kept budgeted and whether the grants come in or not we can budget the appropriate wages for officers to continue the DARE Program.
The Community Diversion has its own fund, and a line item will be created for Safety Town.
There are some donations in the Endowment Trust Fund for Safety Town that we have and maintain a separate ledger for that if we open another Account 200 Fund for Safety Fund those could be transferred into the fund. Mr. Clark stated that the thought is to create three separate line items. Mr. Clark asked Mr. Presley if there is any idea of the cost of administering each of those programs. Chief Wright stated that the cost is almost negligible in the police budget because it is part of the individual’s duties. Safety Town and DARE are part of Officer Ingram’s duties, and Community Diversion is part of Detective Krolkosky’s duties. The actual administrative costs of part of the officers’ daily duties. Mr. Presley noted that under the DARE grant only base wages are received; the city has to pay the benefits outside of the wages.
Mr. Tadych asked if the DARE Grant increases as the wages increase. Mr. Presley stated that it is on the base salary only. Mr. Clark asked how much the annual grant has been for the DARE Program. Chief Wright stated that it is a revolving figure. The city has received as low as $3,000 and as high as $26,000 per year. The Attorney General takes out half of the forfeiture from the drug law violation on a state level. He takes a percentage of that for the DARE Program and that is divided by the number of DARE programs in the state. The number fluctuates both by pool money available and by the number of DARE programs. Over the last ten years the average grant has been $15,000.