FINANCE COMMITTEE
MEETING
JANUARY 18, 2005
The meeting was called to order
by Chairman Fogt at 5:30 p.m.
MEMBERS
PRESENT: Dan Fogt,
Nevin Taylor
Others
Present:
Citizens
Present: David Creviston
1)
2003 Audit
Update
Delayed in getting this
released due to a third party audit of
Independent auditing
company performed 2003 audit. Did a
very good job and completed it in 2-3 weeks, which reduced the cost. Cost to City was $16,000 vs.
approximately $26,000 when State Auditors did audit.
2)
2004
Year-end Fiscal Position
2004 Fiscal position
info was dispersed. General Fund
finished better than anticipated, primarily on expense side. Favorable difference, which represents
actual plus encumbrance compared to the budget number
is pretty significant. All
departments contributed to this favorable position with the exception of
Information Systems due to purchase orders submitted in December, which inflated
the budget amount. With the
additional income tax revenue and expense control, the General Fund ended up
better than in 2003. Reserves are
more solid. General Fund Reserves as of December 31, 2004 - $2.345M compared to
January 1, 2004 - $2.122M.
Mr. Creviston asked for clarification that the 2005 Budget was
not in the red, as reported in the Journal Tribune. Mr. Morehart stated the 2005 budget as
submitted is a deficit budget when looking at projected revenue with the
projected expenditures.
Revenue – looked like it
would be under 2003 levels, but actually finished 3.18% ahead of 2003 and
slightly over forecast $6.2M.
Sewer fund expenses were
down from 2003 and water expenses down from 2003.
Stormwater revenue in 2004
received $345,000. In the final
stages of getting credits taken care of and should be finalized within next
couple months. Averages approximately $37,000 per
month.
Three areas that are
main contributors to General Revenue Fund difference, Employee Benefits, Police
and Fire. Reason for large difference in Employee
Benefits in 2004 budget is City had to account for additional PERS
contributions. State legislation
would have made an additional payment required, which would have used this
amount. This never happened, thus
the reason for the extra. 2005
budget additional appropriation was not made. 2005 number is more reasonably stated.
Police and Fire attributed to expense control management of the Chiefs. Those two budgets represent over half of
the General Fund.
Transfer difference
represented transfer of less dollars for debt
service.
Mr. Fogt asked if we still were working with RITA. Mr. Morehart explained that the
City is operating on its own, however, still has a minor relationship with
RITA. Still some
dollars going to RITA, which will be reported back to the City, which will
continue for a couple of months.
Hope by April 1, City will be totally independent of RITA. In month of January received thru RITA
$440,000, which represents money earned in December and reported to RITA in
December.
Mr. Creviston asked since RITA is not doing the collections
anymore, is it accurate that the City receive X amount of dollars based upon the
half percent income tax being eliminated on the credit or have actuals been prepared?
Mr. Morehart has not had an opportunity to check that. It might be a year or so before the
numbers can be analyzed.
Mr. Creviston asked if the Reserve Fund was a contingency fund? Is there a
difference between the Reserve Fund and the Contingency Fund? Mr. Morehart responded no. The Mayor and he feel comfortable with a
reserve of $1.5M. Ms. House added
that they had Mr. Morehart go through an exercise for what is the worst thing he
could see happening in one fell swoop and how much would
we need to reserve to tide us over until long term plans could be
made.
Mr. Creviston suggested creating a line item for policing monies
in a contingency fund.
3)
2005 Budget
Implementation. Things are progressing
as approved in the Budget.
4)
Additional 2005
Income/Appropriations
Mr. Creviston asked about reciprocity. Feels people are misinterpreting this as
reciprocity between cities. It has nothing to do with that. There is no reciprocity between cities
outside of maybe one city does the same as us, but they haven’t eliminated their
credit.
With the additional
income tax, Mayor would like to see some of the capital expenditures be put back
on as additional appropriations.
Replacement of one truck is in 2005 budget, but would like to see two new
trucks costing about $100,000, including all accessories for plowing snow and
spreading salt. Would also like to purchase a new medic for about $125,000.
Both would be cash payments. Mayor
would like to use part of the additional income or leftover money from 2004 as
debt service for another $1M for paving more streets.
Mr. Taylor expressed
concern for more borrowing. Mr.
Fogt asked if the $1M saved in 2004 budget could be
used for street paving instead of having to borrow or possibly borrow $500,000
and pay $500,000 in cash. Mr.
Morehart stated he didn’t think he could get the $1M.
Mr. Creviston asked about any other additional income the City
may have received. Mr. Morehart
noted the City received a check in the amount of $109,000, which represents the
St. Rt. 38 project. State received
more money from the Federal government than expected. Money will be credited
back into the street fund as additional revenue that can be
used.
Mr. Creviston stated he read in the budget where there was no
money for a riding mower for the cemetery because it was too expensive and the
current mower they have so far is very expensive to maintain. Suggested keeping this
in mind when talking about capital needs.
5)
Aerial Fire Truck
Update
Bid was awarded to Sutphen for $738,730.
Federal grant allows City to take 50% of the cost of truck up front. Sutphen
requires 25% down payment.
Chief Johnson stated by paying this way, the City saves $5,000 in total
cost or increasing our purchasing power by $16,000 in equipping the new truck,
because the grant is $750,000, thus allowing for extra 16K purchase without
increased city budget. Federal grant is for $750,000, with a 90-10% match. Delivery date proposed for about ten
months minimum. Thirty days out
from projected delivery date, will request balance of Federal money and City
would owe their 10%. Federal money
amounts to $675,000, $75,000 is City’s match. Money is already
budgeted.
Mr. Creviston suggested when renewing mutual aid contracts,
factor in a percentage to help pay a portion of the City’s 10%. Feels they need to pay their fair
share.
A minimum of 3 acres is
needed for a fire station. No firm
decision about the
Mr. Creviston asked the status of the Penn Oil site and 410 S.
Main, whether the hospital was interested in purchasing them. Ms. House has recently spoken with the
Hospital Administrator and is waiting for a response. If hospital is not interested in one or
both properties, Council will need to pass different legislation to allow the
sale of property through an auction or bidding process, but will be publicly
posted for proper legal notice.
Meeting adjourned at
6:55 p.m.