CITY OF PICKERINGTON

FINANCE COMMITTEE OF COUNCIL

CITY HALL, 100 LOCKVILLE ROAD

TUESDAY, OCTOBER 30, 2006

BUDGET WORK SESSION

6:00 P.M.

OPEN DISCUSSION ON PROPOSED CAPITAL IMPROVEMENTS PLAN (CIP) FOR 2007-2011 AND PROPOSED 2007 BUDGET

Mr. Hackworth opened the work session at 6:05 p.m. with the following members present: Mr. Hackworth and Mr. Fix. Mr. Smith and Mr. Wisniewski were absent.  Others present were:  Cristie Hammond, Judy Gilleland, Stacey Bashore, Linda Fersch, Chris Schornack, Ed Drobina, Steve Carr, Brenda VanCleave, Bob Cramer, Dennis Schwallie and others.

Parks and Recreation CIP

Mr. Carr stated per the direction of Finance Committee there were some revisions made to our CIP proposal.  He stated that 01 and 02 remain the same and  03 only reflects the disc golf course and 04 is the final payment from the park fund back to the water fund for the land on S.R. 256. He further stated that we put the bulk of the money in 05 for improvements to Victory Park and that is roughly half of the improvements that were noted in the Master Plan.  He added it would be Phase 1 of the improvements recommended in the Master Plan for Victory Park.  Mr. Carr stated 10 remains the same, and we took out money for the bike trails for 2007, but we have money for bike trails in 2008.  He further stated that per the direction of the Finance Committee we took the money that was proposed for the land acquisition and put it into the Parks Master Plan Improvements for 2008.    Mr. Hackworth asked how much of the money for Victory Park would be from impact fees and Mr. Carr answered it would all be from impact fees. 

Debt

Mrs. Fersch reviewed the Debt Schedule Summary with the Committee.  Ms. Gilleland stated if we find additional money we would like to pay additional on all of these amounts.  Mr. Fix asked about the principal and Mrs. Fersch stated the principal is set for 20 years according to the bonds, but we could refinance them in ten years.  Mr. Fix asked if there is a way to pay these down in a shorter term and Mr. Cramer stated it is subject to the limitations imposed by statute, you can go from 20 years down to five years, but the problem is as you collapse the maturity the payment goes up, so you have to be able to manage that annual payment.  He added as you decide the term of the loan, if you have an asset that is going to last 20 years and you finance it over five years, there are 15 years where future taxpayers are enjoying the asset that was financed by current taxpayers, so when you compress the amortization schedule you don't spread the cost out over the taxpayers.   Mr. Hackworth asked when we could convert the police facility to a GO type of bond.  Mrs. Fersch stated we would have to negotiate and now we are going to have enough capacity to turn this into a GO issue and take advantage of our ratings.  Mr. Hackworth asked if there was any way we can convert what hasn't been developed in areas that are under a current TIF and Mr. Schwallie stated that it is worth looking into whether there can be amendments to those TIFs.  Mr. Fix asked what an appropriate amount of debt is for a city of 14,000 people and Ms. Gilleland stated it depends on what stage it is in, whether it is in a growth spurt or a maintenance phase. She further stated she is concerned because the debt is equal to our annual budget.  Mr. Cramer stated Moody's rates the debt, but at this point according to the rating analysis it is not too high.  Mr. Schwallie stated you also have to look at what the source of repayment is and on the utility side they are self sufficient for the long term, and you have also taken steps to deal with the debt you have.  Ms. Gilleland stated in summary, our general fund debt is $8.2 million, our utility debt is $10 million and our TIF debt is $6.7 million.   Mr. Fix asked what percentage should we be paying our debt down each year and are we on track to reach our 20% objective in five years and Mr. Cramer stated he had not calculated that.  Mr. Schwallie stated what we are looking at here tells him that it is on track to do that.  Ms. Gilleland stated we are very close with these numbers.  Mrs. Fersch stated this would probably be a not to exceed figure because we need to pay the minimum of these amounts.  Mr. Schwallie stated there will be a separate ordinance for each of the notes, but they will all be pretty much the same.   Ms. Gilleland stated we budgeted conservatively for the impact fees that we are anticipating. 

Revenues

Mrs. Fersch reviewed the report with the Committee. Mrs. Fersch stated that we do estimate 6% for income tax rather than 7% because there were a lot of big corporate tax refunds and they were asking for refunds and not giving us very much in estimates.  She further stated that some of the areas we fell short on were made up by inheritance tax of $200,000 and interest earnings brought it up too.   Mr. Hackworth asked about reviewing the building permit fees and Mrs. Fersch stated that will be before the Service Committee in November.  

CIP

StormWater

Ms. VanCleave reviewed the report with the Committee.  Mr. Hackworth asked about the stormwater study and Ms. VanCleave stated it is to assess where stormwater is moving and coming up with an overall long term plan for the City. Ms. VanCleave stated SM-07 and SM-08 both deal with Long Road West of Diley Road.  She further stated SM-07 was created to address problems created by the Georges Creek detention basin and SM-08 addresses from Diley Road to the Corporate limit and assesses all areas other than the basin. Ms. Gilleland stated these were slated for the City paying a portion so we have approached the developer and have reopened those discussions.  Mr. Fix asked about the total amount for 2007 and Ms. VanCleave clarified that number wasn't adjusted because of the To Be Determined amounts and we should have more answers tomorrow.  

Water

Ms. VanCleave reviewed the report with the committee.  Mr. Fix asked about the water meter change out program and Mr. Drobina stated we did an internal budget cut and that was cut to keep our numbers where we wanted them.  Ms. Gilleland added that we cut what wasn't absolutely necessary, but we would like to be spending more than that.  Mr. Fix asked why GIS was being pushed back and Mr. Drobina stated we are trying to only increase the water/sewer budget by 3%.  Mr. Fix stated he appreciated that, but spending some of this money now could make us more efficient in what we do.  Ms. Gilleland stated it is a balancing act and she felt more comfortable waiting a year to see how the revenues came in, but we could put the GIS mapping on a contingency list. Mr. Fix asked about the water tower painting and Ms. VanCleave stated it is interior and exterior painting and the interior painting is the critical item.   Ms. VanCleave stated W-23 is to get the waste out of the water treatment facility.  Mr. Hackworth asked what this was for and Mr. Drobina stated it is to upgrade the pump station that is currently there.  Ms. VanCleave stated W-24 was another highly recommended item that was pushed back for a year and it is a bypass line in case we have to shut the aerator down.  Mr. Fix asked if we could find $15,000 somewhere and Ms. Gilleland stated we could take a look at that.   She further stated she would like to go through the budgets and look at the fund balances and get a better idea of how much we are spending and where we need to be.  Mr. Hackworth asked if there was a way to track the water and sewer rate revenues and Ms. Gilleland stated we will find out at the end of next year.

Unfunded Projects

Ms. Gilleland asked if there was anything on the unfunded project list that needed to be on the radar.  Mr. Fix asked what UF-37 was and Mr. Drobina stated it is for existing pre-annexation agreements that we have to provide water or sewer to certain areas.  Ms. Gilleland stated if anyone thinks of any other projects to let her know.

ADJOURNMENT:  There being nothing further Mr. Hackworth closed the budget work session at 8:40 p.m.   

RESPECTFULLY SUBMITTED,

Stacey L. Bashore

Deputy Municipal Clerk