FINANCE COMMITTEE MEETING

 

MAY 3, 2005

 

 

The meeting was called to order by Chairman Fogt at 7:00 p.m.

 

Members Present:  Nevin Taylor, Dan Fogt, Ed Pleasant

 

Others Present:  Kathy House, Tracie Davies, John Morehart, Ryan Horns –

Journal Tribune

 

AGENDA:

 

1)     Stormwater Funding

 

Regarding this issue, Mr. Pleasant shared concern that Mayor Kruse mentioned at the Council Meeting, that there was not enough that could be borrowed against.  Mr. Pleasant felt that borrowing was not the intent of this committee when the previous legislation was discussed and passed.  Mr. Morehart stated after this $40,000 appropriation, they would still have almost $180,000 in appropriated funds.  The City is only generating $30-35,000 per month in revenue.  Driving this would be if there were regular O&M expenses, how much would be left to pay for debt service on the amount borrowed.  The debt service may take up all the potential cash – the $30,000 per month.

 

Mr. Pleasant shared his frustration.  When the legislation was passed to increase the number of years, he felt the City would relook at the stormwater priorities and determine priorities above and beyond what City is doing on regular maintenance.  He would like to see some long-range solutions to some of the major areas of concern such as, the airport south area, Hickory and Kenny Road and Edgewood and Hickory.  He’s not in favor of any additional assessment on the public.   Ms. House noted the one piece of legislation is to work on the stormwater issues in accordance with the paving.  Mr. Fogt noted that we’re paying 1/3 of Joe Tracy’s salary and 1/3 of a backhoe.  Mr. Taylor is not in favor of borrowing when we have $300,000 per year coming in, until he sees that we have a need to have $300,000 a year in there.  Capital improvements that are being made should last more than five years.  With $360,000 this year and the $180,000 after these appropriations and $30,000 coming in per month, he asked what other programs or big expenses will be needed?  He noted paving makes logical sense, but not borrowing money for more employees, etc.  Ms. House noted the City is not borrowing any money right now.  Mr. Taylor and Mr. Pleasant stated that is not the impression given the other night.  Mr. Pleasant stated using any one of the three projects he previously mentioned would take possibly $500,000 to $1M for each project.  He felt that when the length of the assessment was increased for an indefinite period of time, the City would be able to look at some long-range, high-funding projects.   He asked for clarification of the intent of the legislation.

 

Mr. Morehart stated the legislation was to give the City the opportunity to borrow.  Initial legislation passed in 2003 prevented the City from borrowing so that was changed last year. 

 

Mr. Pleasant would like to revisit the priority listing.  He’s interested in identifying things that are causing the problems.   Need to balance the small projects with the major projects.  Also need to have a long and short-range plan.

 

Referring to the January Income Statement, Mr. Fogt noted the Stormwater Fund listed $42,526 as stormwater income in January, but it was stated that $30-35,000 was the average income.  Mr. Morehart stated he had just received the April income statement and the figure was $30,618.  Was unsure if additional credits were included in the $42,526 number.

 

Mr. Fogt noted that according to the airport officials and documentation, the City would not be allowed to put a detention pond at the end of the runway for fear it would cause an airplane accident in Greenwood Colony area.  Need to find an alternative to this plan.

 

2)     Alternate Financing

 

Mr. Fogt referred to the information distributed on “Pay As We Grow Plan”  for various areas in Columbus.  Each area is different.   When establishing this plan, the committee looked at the public and private sector job growth and the residential growth and came up with infrastructure needs.  Also recommended developers to contribute to those needs.  Also looking at TIF’s. 

 

He noted that Delaware City has impact fees in place and are looking at increasing those fees, as well as tax hikes.  Impact fees are currently at $1,068 for parks per house, proposing an increase to $1,426; $259 for fire,

proposing an increase to $349; $150 for police, proposing an increase $162.  They want to add new municipal fees amounting to $366.  These proposals are still in the talking stages.  No decisions have been made.    He stated residential and retail does not pay for itself.  Mr. Fogt feels developers need to help pay for the growth.  When asked if staff had discussed impact fees, Ms. House noted the Mayor was not a fan of additional fees.

 

Mr. Pleasant would like to see more research on figures.  Feels as Mr. Fogt does, growth needs to pay for itself.  More discussion is needed with Administration to get their philosophical views.  Mayor Kruse has stated in the past that the City will grow itself out of financial trouble.  Mr. Fogt noted it hasn’t worked in the last 15 years and doesn’t see how it will work in the future.

 

Mr. Taylor is still on the fence whether or not impact fees are the answer.  He asked for a status of the various funds.  Mr. Morehart responded the General Fund is in decent shape.  The Water and Sanitation Funds are in good shape, as well as the Sewer Fund.  Overall, funds are in good shape.  Revenue is strong.  Expenditures are up from last year, but that’s expected.  Mr. Taylor commented that recently there have been a lot of appropriations from unappropriated funds.  Mr. Morehart stated spending those dollars will bring down the reserves.  At the end of 2004, reserves in the General Fund were $2.3M.  That figure is now down to $2M.  He expects that figure to come down.  He and the Mayor are comfortable with keeping the reserve at $1.5M.

 

Mr. Fogt noted the article in this evening’s Journal Tribune about the state proposing to terminate the TIF’s as part of the State’s budget proposal.  There is also talk about eliminating all of the TIF language from the budget proposal and reintroduce it at a later time on the Mayor’s budget.  Mr. Fogt asked if this would affect TIF’s already passed.  Response was yes.  It would bankrupt the TIF’s already passed.

 

3)     5-year Capital Plan

 

Mr. Morehart asked that this agenda item be postponed until the June meeting because the 5-year Capital Plan is not yet complete.

 

4)     Sewer Feasibility Study

 

Mr. Morehart explained that a feasibility study is needed for the proposed rate increase.  The study is not yet complete, but should be ready by June 1, at which time the information will be given to Finance Committee.   This information is needed to justify, from an engineering standpoint, if the proposed rate increase is needed.  The study provides assurance that expenses, revenues, etc. have been looked at, and also investors would expect this study if borrowing is required.

 

5)     City Hall Roof Repair

 

Able Roof made $3700 worth of emergency repairs earlier this year.  City had Able Roof come back to look at entire roof.  They gave a couple of options ranging from $60,000 to $110,000.  For the lower dollar amounts, the repairs are more temporary and work is guaranteed for about two years.  The more you pay, the more years of warranty you receive.  Able recommends immediately doing Section C & D.  These areas are constant problems when it rains.  The cost for repairing these sections would be around $33,000.  Decision needs to be made whether to piece-meal the repairs or do everything at once.  Consideration must be given to how long this building will house City Hall.  Thought was that City Hall would not be moving in the near future.   Decision was made to proceed with fixing the entire roof.  Project will be bid out, so could possibly come in below the requested $110,000.   Finance Committee agreed to co-sponsor the appropriation legislation.

 

The meeting adjourned.