FINANCE COMMITTEE MINUTES

 

JUNE 12, 2006

 

The meeting was called to order by Chairman Burke at 6:45 p.m.

 

Members Present:  David Burke, Dan Fogt, John Gore

 

Others Present:  Kathy House, John Morehart, John Green, Ryan Horns

 

AGENDA:

 

·        Sale and Purchase of Property

 

The property in question is 410 S. Main Street.  It was advertised for sale through bid process, but had no takers.  City Law Director said City could proceed to sell or solicit for sale in any other manner the City chose.  The City put a sign in the yard and passed out flyers.  Three people toured the house and City received one sealed bid.  It is more than 30 days old, so not sure if party is still interested.  Bid was for $44,000.  The appraisal done on 10/19/04 was for $65,000.  The house was purchased on March 11, 2002 for $70,000.  Mr. Gore recalled this property was purchased to tie in with area property in order to build a new City Hall.  Mr. Gore asked what happens to it if we don’t sell it for $44,000.  Ms. House said we need to do something with it because it’s becoming a blight.  It would cost the City $70,000 plus whatever we put in for demolition.  Ms. House does not believe we could sell the lot for $70,000.  Finance Committee needs to decide whether or not to accept this bid. 

 

One option would be to dedicate additional funds to see if the City can fix it up and make it livable.  Mr. Gore asked if it could be made into office space.  Ms. House was not sure of the zoning district, whether it could be used as office space.  She said it would take a lot to fix it up to make it usable.  Mr. Morehart suggested a counter offer of $55,000 to see what feedback we get from the bidder.  The hospital is not interested in this property.  Motion was made to make a counter offer, $55,000 plus closing costs.  Affirmative voice vote was unanimous. 

 

·        Former Country Skillet property.

 

Mr. Gore moved to go into Executive Session to discuss purchase of property, seconded by Mr. Fogt.  Affirmative voice vote was unanimous.

 

Regular session reconvened.

 

·        Additional appropriations for 2006

 

Ms. House stated the staff has put together a list of items that got cut out of the budget  process last year.  The Mayor asked Mr. Morehart to take a look at where the City finances were at the close of 2005 and where the spending left the reserves.  The philosophy has been to spend down the reserves to where Mr. Morehart feels is reasonable.  The City has been able, with the addition of our Income Tax Department, to keep up with better income than in the past.  Thought was to spend down by getting some of the items that were cut out of the budget.  She asked for Finance Committee’s input.

 

Mr. Gore stated the City has been involved in the community, support-wise, as has the County, townships, etc., financially.  Would like to see the City more visible/involved financially in the way of donating in the way of community-type sponsorships.  Mr. Fogt asked about Joint Rec contribution.  Mr. Gore stated this is becoming part of the budget process.  Ms. House noted that Joint Rec made a request for help in paving the parking lot and the City is responding by giving them $3,800 out of the Parkland budget.  Mr. Gore is not sure it’s proper to take the money out of the Parkland budget.  He suggested finding something out of the annual budget to pay the City’s portion, 3/7.  The City made a commitment long ago and feels we should do our share.

 

The salt barn tops the list of capital needs. The existing barn is in really bad shape.  A new barn would be built at the PSC and would be built to last for many years.  The cost of this would be $270,000.  Mr. Morehart feels he can fund all of this out of the reserves.  Administration feels comfortable with keeping $1.5M reserves in the General Fund, and they are well above that now.  He feels the City can afford to spend the $665,000 and realistically stay above the $1.5M.

 

Mr. Fogt asked if Administration was working on the City Planner position.  Ms. House stated the legislation for this position should be before Council in the near future.  The Asst. City Engineer position is already in the budget.  Mr. Fogt stated he does not want to approve the proposed expenditures, then hear that we don’t have money for the Asst. City Engineer or City Planner.

 

Top three projects are:  #1 & 8 Public Services and #1 HR.  Mr. Gore stated #8 has gotten some attention recently.  Ms. House stated W. 5th Street is waiting for the study to be completed.  $6,800 is the quote to repair the crossing, such as rails, ties and concrete panels, but does not include gates or lights at the crossing.  It is Ms. House’s understanding that CSX is going to do the rails, ties and asphalt no matter what.  She will clarify that.

 

Ms. House stated HR is almost out of storage space. 

 

Mr. Gore stated he got a call from a resident saying that the worst street in this City is 9th Street between ______________ (Mr. Gore will get the name of the street) and it’s not on the list to be paved. 

 

If a salt barn is needed, we need to do that now.  Mr. Burke said that he had seen it and it is definitely in bad shape. 

 

Mr. Gore stated he would support the network upgrade also. 

 

Mr. Gore would like to look at the list before making any decisions, although he agreed to proceed with the salt barn and network upgrade. 

 

Mr. Gore asked about the Bat Wing Mower Replacement which was requested to be funded by Paris Township.  Ms. House stated Paris Township said no to funding it.  They funded the pool upgrade, which consisted of remodeling the restroom and adding on to the concession area.  The City sent them a request for $90,000 worth of things and they chose the pool upgrade.  They have no legal responsibility to fund City projects.  Mr. Morehart stated the money they give to the City is tax dollars paid into Paris Township and reimbursed back to the City.  The majority of the residents of Paris Township are residents of the City.  Mr. Gore said he would like to know if they are legally obligated to give money to the City. 

 

Mr. Gore expressed support for sidewalk replacement program seed money.  Mr. Burke explained this would be a $10,000 program that would be 50/50 matching funds up to $500 per resident or business on a sidewalk repair project.  By planting shade trees and abiding by the Codified Ordinance, the sidewalks become up-heaved and broken, etc.  This would allow for the City to meet the property owner half way; that way the resident can get $1,000 worth of sidewalk repair done for the cost $500.00.  The City would have a form explaining this.  Residents would complete the form, return it to the City.  City would inspect in terms of severity, submit to a contractor for bid and sidewalk would be torn up and replaced at the same time. 

 

In summary, Mr. Gore would like to see the following projects:  salt barn, sidewalk replacement program, network storage upgrade and concrete panel installation for RR crossings.  He wants 5th Street railroad crossing added to the list of crossings.  

 

Mr. Morehart explained the Payroll & Financial Systems software upgrade.  The current system was purchased in 1998. There is an upgrade available that would enhance the payroll, payables and the financial system.  The ______ system through SSI, is the software that was purchased for Utilities Department.  He expressed concern that SSI would eventually quit servicing the system after it’s so old.  The new system will provide more opportunities for flexibility and provide more services internally for the employees. 

 

It will provide more opportunity as far as payables, possibly getting more involved in electronic transactions.  Purchase order module will provide the department head the opportunity be more involved in inputting their own purchase orders.  Software & Hardware for Check Signing with Security will provide the opportunity for check signing on the system totally.  Everything is done manually now.  This is another mechanism to prevent fraud. 

 

Mr. Gore supports computerized police speed monitoring radar device and mobile police radar units.

 

Mr. Fogt supports repaving of City parking lots.  Ms. House stated that when these get paved, parking spaces will be redrawn again.

 

Committee agreed on appropriating funds for the following:

          Salt barn                                                     $270,000

          Repave City parking lots                              $80,000

          Concrete panel installation for RR crossings

                   Delaware Ave. & Main St.                            $30,000

                   Industrial Parkway                              $36,400

                   Cherry Street                                               $11,600

                   Fifth Street                                         $  6,800

          Sidewalk replacement program seed money   $10,000

          Payroll & Financial Systems Software upgrade

                   Basic upgrade                                    $26,000

                   Purchase order module                       $11,000

          Software & Hardware for Check Signing

             with Security                                             $12,200

          Network Storage Upgrade                                      $30,000

          Computerized Police Speed Monitoring

             Radar Device                                            $  3,735

          Mobile Police Radar Units                                     $  5,424

         

Administration will check to see if State vehicles are still available at $17,800 and report back to Council. 

 

Ms. House will gather more detail on remaining items for further consideration.

 

·        Commercial/industrial meter rates

 

Mr. Burke explained that he and Eric Phillips had met to devise a way to appropriately, through economic incentives, entice employers within the municipality and the county within our water & sewer system to locate in this area. (System Capacity Fee Incentive Policy –draft attached).  This plays off the Economic Development Action Plan (EDAP).  Section I explains the EDAP. 

 

Section II explains the Economic Development Incentive Policy (EDIP).  This talks about infrastructure cost participation and how everyone plays together, different jurisdictions and developers, to build what needs to be built.

 

Section III.  System Capacity Fee Incentive Policy (SCFIP).  There has to be a positive balance of at least $500,000.00 in both the water and sanitary sewer enterprise funds.  Mr. Morehart asked if the $500,000 should be in capital funds or operating funds.  City should not be waiving any fees on sewer taps if there is a negative balance.  Mr. Morehart commented that those fees don’t go into the operating fund.  Ms. House noted we need to talk about our commitments to our debt service – how are they affected by this.  Could possibly use a weighted number through out the year.   $500,000 is an arbitrary number, should it be $2M or some other number.  You are basically using the people’s money to reinvest in infrastructure that generates more money back to them. 

 

This policy will not be used on a regular basis.  Will be used only for 3” taps or larger.  This is targeted for industrial or office and certain uses.  Certain constraints must be met. 

 

Development projects must meet at least three of the following requirements:

1.     Projects with more than 50 jobs created or retained.

2.     Projects which private investments exceed $5,000,000.00.

3.     Projects which have an average payroll exceeding $50,000.00 per employee.

4.     Total payroll for created or retained jobs is at least $5,000,000.00.

5.     Industrial or Office Developments.

6.     Projects which result in retention of an existing business and/or jobs.

7.     The use in the development has been identified in the EDAP as a use that should be targeted for expansion in the City.

 

Need to have no less than a 3” meter size.  The Mayor may reduce the charge to an amount not less than the existing charge of a three inch meter.  There is some flexibility built in for Administration.

 

Projects located in the Historic Uptown Marysville Design Review District.  For industrial, commercial or office projects which exceed $10,000.00 for remodeling construction or $350,000.00 for new construction and which require a second water line for a fire suppression system, the Mayor may approve a 100% waiver of the system capacity fee for the second water line for the fire suppression system.

 

High impact projects as determined by the Mayor.  If something fell out of these parameters, the Mayor and City Council could approve.

 

Goal here is this is up front cash for these businesses and City would not have to abatement so much of the income tax side of the money.  Instead of abating 1/2 %, maybe ¼% or zero. 

 

Mr. Morehart noted a correction to III. C., 5th line, “increased” should read “decreased”.

 

This draft should be reviewed by everyone.  Input is welcome.

 

The intent is to bring major employers to the area and give us another “shoe in”.  It allows us to enter into agreements that we may not have the ability to enter into, such as if a major employer wanted to move into Jerome Township, City could help with tap fees in exchange for some income tax dollars.  This will enable the City to solicit businesses which we want to the area.  Ms. House added that this benefits the business owner with an upfront savings and yet the City recoups forever because of the income tax revenue. 

 

Mr. Morehart said City would have to watchdog this, as is done with all incentives. 

 

Mr. Fogt asked if school would qualify for this incentive, for instance on the fire system.  Ms. House stated this happens only in the Historic Uptown District. 

 

Mr. Green asked if there was a way to say that tap fees are a one-time shot to the businesses. Is there any way to work something out where the general fund would offset a portion of the cost back to the enterprise fund, because you would generate all of these additional income tax dollars at the expense of the sewer plant.  Ms. House said not necessarily because it’s just the differential between what the 3” costs and whatever size they end up with. Mr. Burke feels you could take general funds and put them into a sewer and water fund.  Mr. Morehart stated this policy is in lieu of any other incentive.  They could not get a property tax abatement, etc.  An employer can save $30,000 up front or save a couple hundred thousand on abatements over ten years.  Mr. Burke pointed out that it’s a 6” or 8” waterline compared to a 4”.  It’s pretty close to apples to apples. 

One major concern is abuse.  Someone could take the money out of these funds by abating things that don’t benefit the City at all.  That is not the intent.  When reviewing this draft, be critical. 

 

Meeting adjourned.