FINANCE
COMMITTEE MEETING MINUTES
AUGUST 14,
2006
The
meeting was called to order by Chairman Burke at 6:45 p.m.
MEMBERS
PRESENT: David Burke, Dan Fogt Excused: John Gore
OTHERS
PRESENT: Kathy House, John Morehart, John Green
AGENDA:
1.
2006 additional appropriations.
Ms.
House referred to list of possible additional appropriations that was discussed
at the June 2006 Finance Committee Meeting.
The highlighted items were approved for submittal to Council as
appropriation legislation. The items not
highlighted were items the Committee had asked for more information on. Ms. House submitted detailed information on
these items. She noted three additional
appropriations that had come up since the June meeting, the doors at the Public
Service Building, the painting of the pool and the UPS for the Police.
Mr.
Fogt said painting of the pool is considered
maintenance, and the Parkland Fund is to be used only for capital improvement
expenses. Mr. Morehart
said you could make a case both ways. It
could be seen as maintenance or it could be seen as lengthening the life of a
capital asset. Ms. House sees it as a
capital outlay since it’s only done every 5-10 years. Mr. Green felt the legislation was pretty
wide open as to what Parkland Funds can be spent on as far as Recreation is
concerned.
At
the end of July, unappropriated amount in General
Fund was $2.4/2.5M. That would be the
amount in the reserves. Mr. Green said unappropriated is in the range of $1M. Balance in the
appropriated fund is around $200,000. $100,000 can be designated for budgeting
purposes this year. There is enough
budgeted to spend this year on items that are budgeted but not
appropriated. $18,000 was approved in
the Parkland Fund for this particular project.
This appropriation is the difference between the budgeted number and the
actual cost of the project.
Ms.
House noted that
Vehicles
will be purchased from Courtesy Auto Superstore in
Mr.
Fogt expressed concern with the truck wash. Ms. House stated it’s basically the water
line that will be run from the PSC to the salt barn. It may be less than $10,000. City will use their own
labor. Mr. Fogt
expressed concern that the trucks will be washed in 20 degree weather. It doesn’t make sense to wash the vehicles
when it’s so cold. Ms. House stated the
brine system requires a water line as well.
Mr. Fogt and Mr. Burke agreed to co-sponsor
the legislation for these appropriations.
2. Meeting compensation for
Boards & Commissions
Mr. Morehart explained
the Design Review Board was recently established. Compensation for this Board needs to be set. Design Review Board used to be Planning
Commission members. Planning Commission,
Parks & Recreation Commission, Civil Service and Board of Zoning Appeals
are currently paid $25 per meeting. The
Mayor feels an increase across the board is in order and said he would support
$50 per meeting. He will sponsor the
legislation for this increase. Mr. Burke
stated the $25.00 compensation has been in effect since 1984. Out of 37 cities/villages, 10 of them
compensate their board members. Mr.
Burke feels $50 per meeting is reasonable.
It was agreed to increase the per meeting compensation to $50 for
Planning Commission, Design Review Board, Parks & Recreation Commission,
Board of Zoning Appeals and Civil Service Commission. Ms. House suggested an annual review of fees.
3. Investments
This issue came about as a result of recent
discussion. Mr. Morehart
said the City has $15.5M in Star Ohio, $57M in Fifth Third Securities, which
includes the $55M borrowed in December of 2005.
The average yield in everything we have with Fifth Third Securities is a
4.78%. The range is 4.5% to 5.6%. Over the last month or two the yield has gone
up to a point where the most recent investments yield 5.5%. Within the last few weeks, the rates have
started to drop a little. With that you realize a little bit of a negative on
the investment side, but a positive on the borrowing side.
Mr. Fogt feels the City
should bid out services to more banks than just one. Mr. Morehart says
he has to bid out banking services every five years per the Ohio Revised Code.
Bids are due tomorrow from banks who are interested in our banking
services. The contract with Fifth Third
Bank expires at the end of September. As
of today, only one bid has been received.
Legislation will be submitted permitting the Finance Director to select
the bank that meets the requirements.
Banks will have to submit the bids properly and must qualify. The City is limited as to what they can do
with their money as opposed to what some other companies can do. Fifth Third and other larger security
companies would be more in tune to the government requirements that the City
can do and cannot do as dictated by the Ohio Revised Code. It makes sense to use one of the larger
security companies. Some cities hire a staff member to deal exclusively with
investments, but he does not feel Marysville is at that point and may never
be. Mr. Morehart is
comfortable with the individuals he’s dealing with and their strategies as far
as dealing with the investments the City has with them. Fifth Third wants to do a good job for the
City. The yield dollars that we’re
receiving are very important to the capital projects because those go into the
capital funds and operating funds and are either used to keep the borrowing
down or help towards the debt service.
Mr. Morehart has no problem bidding it
out. Mr. Green added that should another
company get the bid, they could only invest in the same things that Fifth Third
would invest in. By law, the City is not
allowed to invest in anything that is very risky.
4. Preliminary discussion of
2007 water rates
Ms. House said the water rates were set for only
one year for 2006 because City was in the throes of finishing the water master
plan and reservoir plans were incomplete.
City needs to look at 2007 rates.
It was recommended when the Water Master Plan was completed, that the City
look into having our plant re-rated. A
study is needed that would show the EPA that we could process more than what it
was previously rated. That study will be
done within the next couple of months.
The study should be finished by the end of the year. City feels sure they will be able make the
rate higher so it will buy City more time in capital projects. The Water Master plan estimated that City do
the reservoir this year. Hope to have
the bid books out this year and probably will not need to borrow the money or
award the contract until 2007. In 2007,
projection was that we would pay for the engineering for a new treatment plant
if we could buy two to three years, possibly five years before we have to build
that new plant. That also pushes the
engineering out. This study suggests
that the new treatment plant be constructed in 2009. City thinks the construction is off this
chart but won’t know until the plant re-rating study is completed and EPA
authorizes us to do that. The original
cost was estimated at $17M when the study was completed; City feels it will be
more than that, but don’t know that for sure.
The Water Master Plan suggested a 5% increase in
2006, which was done, then 8% for the next four years. This was based on the previous schedule. Since we’re not following that schedule,
Administration suggested that the rate be set for just one more year until the
new rating study is completed. The
percent of rate increase is not known at this point. Legislation must be to Council by the end of
October. Mr. Morehart
stated with what is known now, it probably should not
be 8% since the projects have been moved out of the five-year period. Mr. Burke suggested 6 or 7% in order to build
up a capital reserve earlier to smooth it out further down the line, allow for
some additional tap fees for growth to come into that fund, then
instead of 8% for the next four years, go with 6, 7, 7, 6%. Administration may ask the engineering firm
to do an update of the financial model when it gets time to make this project
happen. The rates proposed by Mr. Burke
for the people that live here now will fund the $4M, and should accurately
reflect replacement cost of the
plant we’re using now. Additional
infrastructure should be funded through tap fees and additional users.
5. Off-duty Detail – Police
Cruiser Rates
Presently, the City is charging $5.00 per hour for
the use of a cruiser on an off-duty detail, i.e. an additional officer at a
construction site. In order to
facilitate that traffic control, a cruiser is necessary. With the increased cost of fuel, $5.00 per
hour per cruiser is not sufficient.
Police Golden took an informal poll of various Sheriff’s Department and
others. Some pay $10.00 an hour, others had combinations of the officer &
cruiser. The Sheriff’s Department
charges $8.00 with a minimum of three hours, so it’s $24.00 regardless whether
you use it 15 minutes or 2 hours 59 minutes.
The Chief would like the fee to be increased to $8.00. There is nothing in writing stating the
existing fee. The Chief would like some
flexibility with Ms. House’s approval, to determine which ones need to have the
rate charged and which ones don’t. He
feels the three hour minimum is excessive.
The City does not pay the officer.
They are paid by the contractor.
The $5.00 per hour cruiser fees comes to the City. Mr. Fogt and Mr.
Burke agreed with the increase to $8.00 per hour per cruiser. Legislation will be presented to Council.
6.
Ms. House was instructed to counter-offer the one
bidder for the house on
Country Skillet property,
7. Tap Incentive Policy
Mr. Burke made some changes to this policy. Newest updates are in bold text and
underlined.
III. System Capacit
y Fee Incentive Policy.
….balance of at least
$1,000,000.00 in its water enterprise fund and $1,000,000 in its sanitary sewer
enterprise fund… . Staff asked whether this was operating fund
or capital fund. Response was capital,
unencumbered fund.
Mr. Morehart questioned
the last paragraph in II. “The City of
Marysville desires to expand the infrastructure Cost Participation section only
applicable to properties in Union County to include a System Capacity Fee
Incentive Policy (SCFIP). “ He felt
language should be added in affect that the City receives income tax revenue. For instance, another Honda comes to
Marysville outside the City limits and wants City water. Mr. Phillips should draft some language to
insure that the City would receive income tax revenue from a JEDD.
Another discussion point was that when this would
be followed there would be hypothetically and realistically a capital loss
reduction in capital dollars to the capital enterprise funds. Would the general fund, since they are
getting additional income tax dollars, be in a position to offset those dollars
that were lost? In the next five years,
the growth that the City is going to be involved in will require a substantial
amount of capital dollars. But in this
particular situation even though it’s an exception rather than a rule because
of how it’s worded, the capital dollars will be less, but the general fund will
benefit because of the additional income tax dollars from the particular
project we’re looking at. Should the
general fund reimburse the capital fund for those lost dollars? Mr. Burke said the General Fund could augment
those funds if they fall short. Mr. Morehart wondered if that could be written in where the
City could reimburse the capital dollars that are lost, depending on the
financial condition of the General Fund.
You probably don’t want to make it mandatory.
Section III. A. Industrial, Office and EDAP
Targeted Uses. “The City of Marysville
System Capacity Fee Incentive Policy Fee Policy (SCFIP) shall apply to Industrial or Office Development
projects meeting at least three of the following requirements within two years
of the certificate of occupancy being issued:
1. Projects with more than 50 jobs created;
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. The use in the development has been identified in
the EDAP as a use that should be targeted for expansion in the City.
Mr. Burke agreed with Mr. Morehart.
The primary function of those additional fees is to
increase the burden on the current resident.
III.
A.
The use of the SCFIP for industrial, office and EDAP targeted uses can
only be used solely and cannot be used with any tax abatements, municipal
Change above language to read as follows: The use of the SCFIP for industrial, office
and EDAP targeted uses can not be used with any tax abatements, municipal…..
Mr. Morehart stated what
this says is to participate, it’s one or the
other. You either participate in this
program or you can’t participate in any other.
The option could be left up to the employer. How about the City
considering a straight abatement.
The savings up front could be pretty important. Mr. Burke said the $200,000 up front is
probably equal to one-half million over ten.
Propose changes as follows:
III.
A.
The
City of Fee Policy
This
would mean that FOR
a development project satisfying at least three of the requirements listed above
and requires ing a meter sized above three
inches……
B. For industrial, commercial or office projects in the Historic
Uptown Marysville Design Review District which would exceed $20,000.00
for remodeling construction or $200,000.00 for new construction…..
On projects that are
determined to have a major impact on the city, the amount of the system
capacity can be increased
decreased ……
Mr. Burke asked Ms. House and Mr. Morehart what they thought about this in concept. Mr. Morehart said
this provide options for employers and possibly provides additional incentive
to Mr. Phillips when talking to major retailers, etc. This will have to go before Council before
approval after the Mayor reviews.
Mr. Fogt commented that
the Historic Uptown Marysville portion is equally important. System Capacity fee for the second water
line can be waived. A minimum project is
$20,000.
Meeting adjourned at 8:38.