WEDNESDAY, FEBRUARY 20, 2008

REGULAR MEETING

7:30 P.M.

1. ROLL CALL. Mrs. Hammond called the meeting to order at 7:30 P.M., with roll call as follows: Mr. Sabatino, Mrs. Hammond, Mr. Smith, Mr. Fix, Mr. Sauer, Mrs. Sanders, and Mr. Wisniewski were present. No members were absent. Others present were Mayor O’Brien, Tim Hansley, Lynda Yartin, Linda Fersch, Ed Drobina, Steve Carr, Dennis Schwallie, and others.

2. APPROVAL OF MINUTES OF January 16, 2008, Regular Meeting. Mr. Smith moved to approve; Mr. Sauer seconded the motion. Roll call was taken with Mr. Fix abstaining, and Mrs. Hammond, Mr. Sabatino, Mr. Smith, Mr. Sauer, Mr. Wisniewski, and Mrs. Sanders voting “Yea.” Motion passed, 6-0.

Mayor O’Brien read a proclamation in honor of National Engineer’s Week, February 17 through February 23^rd.

3. FINANCE DEPARTMENT.

A. Finance Director’s Report. Mrs. Fersch stated she had not provided a written report to the Committee but she would be happy to answer any questions. Mrs. Fersch stated we are only up one percent on income tax over this time last year.

B. Review and request for motion to approve draft ordinance amending the 2008 appropriation, Ordinance 2007-85. Mrs. Fersch stated she submitted a draft appropriation ordinance to the Committee for review. She stated she was requesting the document-imaging contract be moved from Miscellaneous General Government to Lands & Buildings under General Fund, and this is at the recommendation of the Auditor doing our report this year. Mrs. Fersch further stated under the Aquatic Recreation Fund, she was requesting the appropriations based on Mr. Carr’s estimated expenses for this Fund. Mr. Hansley stated he would provide a detailed budget sheet a little later in the meeting. Mrs. Fersch stated she was also requesting an increase in Water Capital Improvement for the Water Treatment Plant Waste Pump Station project. She stated she would be happy to answer any questions anyone might have. Mr. Sauer clarified the budget for the Aquatic Recreation Fund is based on what our estimated expenses would be. Mr. Carr distributed to the Committee a draft 2008 budget for the Aquatics Division, and Mr. Hansley stated he would like to point out the closing costs of not to exceed $10,000 are listed under Professional Services/Legal Fees as these are fees above their retainer. He stated by approving this budget this Committee would be approving those fees. Mr. Sabatino stated Mr. Hansley had indicated in the past that we would not be charging sales tax, however, on the revenue budget it shows income from sales tax. Mr. Carr stated people that have already purchased a membership paid the sales tax of 6.25 percent, so this budget proposes to keep the membership cost at the original price plus the 6.25 percent. He stated this would help us as we are offering a 25 percent resident discount fee. Mr. Sabatino inquired if in 2009, Mr. Carr was proposing to charge the 6.25 percent again. Mr. Wisniewski stated we were not charging sales tax, and Mr. Sabatino stated in effect we are. Mr. Carr stated a Violet Township resident, last year, paid $318 plus 6.25 percent, or $338.00 for a family membership. He stated he is proposing that family membership for non-residents still be that $338.00 and a residents cost would be that $338 minus 25 percent. Mr. Hansley stated this would be additional revenue to us, and Mr. Sabatino stated he felt this was disingenuous to be charging an extra fee. Mr. Hansley stated this gives us the ability to offer the discount to our residents, and non-residents would be charged the same rate they were charged last year. Mr. Sabatino stated he would feel more comfortable for 2009 if our fee was one fee for non-residents and one fee for residents and not have the plus and minus figure. Mr. Smith clarified the swim club did not have multi-year passes so the only passes we are inheriting are the passes that were sold in late 2007 for 2008. Mr. Hansley stated that we have agreed to honor the 40 passes that have been sold, and the current owner will retain the funds received for those passes. Mr. Hansley stated once Council approves this budget, the fee schedule is set in place. He stated, however, one area that is not addressed is the issue of daily pass sales. Mr. Hansley stated we are reserving the right to offer multi-day passes, and that decision will be made in the future. He stated we are waiting to see how the annual memberships go before making a decision on daily passes, as we do not want to overcrowd the facility. Mr. Sauer clarified it is anticipated the surplus funds be kept in the Aquatics Recreation Fund for the first year or two for any emergency repairs, etc. Mr. Hansley stated at some point some funds can be transferred back to some recreation capital improvement fund. Mr. Smith moved to approve and forward the appropriation ordinance to Council; Mr. Fix seconded the motion. Roll call was taken with Mrs. Sanders, Mr. Smith, Mrs. Hammond, Mr. Wisniewski, Mr. Sabatino, Mr. Fix, and Mr. Sauer voting “Yea.” Motion passed, 7-0.

C. Dennis Schwallie, Peck, Shaffer, & Williams, LLP – Overview of City’s Debt. Mrs. Fersch introduced Dennis Schwallie who has been our Bond Counsel for about twenty-five years. She stated Mr. Schwallie has given the City very good advice and has provided workshops for new Council members and that is what she had requested he do this evening.

Mr. Schwallie stated he is a Bond Lawyer, which means he spends most of his time working with various political subdivisions when they borrow money. Mr. Schwallie distributed a memorandum as an Introduction to Municipal Debt in Ohio for all Committee members and reviewed the printout with the Committee and stated he would answer any questions. Mr. Wisniewski stated he was not sure that our debt services that we have accumulated to date, and what we are paying toward it, coincide with the issuance of these debt limits; as to when they are supposed to be paid off for whatever particular type of project it is, whether it is S.R. 256 or Diley or whatever. Mr. Schwallie stated a lot of the City’s debt is in non-revenue producing enterprises. He stated the water and sewer debt takes care of itself, but it is the streets and non-paying infrastructure needs that are somewhat unique that you are facing, and the impact fees are a way of going at this. Mr. Schwallie stated the borrowings that have been done have been legal, there is a requirement that you provide for them in your budget and if that is going to be a pinch going forward, you need to be aware of it, first of all if you are facing any new borrowings, but also looking towards whatever your sources of revenue are to change that situation. Mr. Schwallie stated with regard to borrowing, there is always the question of if it is the right thing to do on a given project.

Mrs. Fersch stated over the years we have always had three to four bidders on our issues because they have seen us as a growing community, they have seen us be very conservative with our funding, and that we are paying principal where we can. She stated we have a very good reputation in the market as noted by the Moody’s rating and also by those that bid on our issues. She stated just past few years we have gone out past the State of Ohio in requesting bids, before it was just local banks and brokerage houses. Mr. Sabatino stated he thought that was because we didn’t have a rating at that point in time, and Mrs. Fersch stated that was correct. She further stated we took advantage of bidding over the Internet also.

Mr. Sabatino stated Mrs. Fersch had sent an e-mail about the rates we were getting and one of the comments was that the City did not have an official fund balance policy, and he thought that in practice we have carried over enough, but we don’t have a policy in place. He stated he thought we ought to have a policy that says whatever the magic number is that is the floor for our carryover balances. He stated he would like to know if Mr. Schwallie felt it would be beneficial or not to have that policy. Mr. Schwallie stated because he works on the debt side, his reaction is to follow the rate agencies, which is if they think it is a good idea, it is probably a good idea. He stated their focus is on trying to project the possibility of default and give advice as to how best to shore that up and having a good carryover balance is one way to do it. He stated because of fund accounting, that is a carryover balance in one fund cannot necessarily be moved to another fund, his question would be which funds and how much. He stated it is good to have a healthy carryover balance in your general fund. He stated government is not supposed to make a profit, it is supposed to be more or less a break even enterprise, and he felt the bigger discussion to have would be what the appropriate percentage for a City the size of Pickerington, would it be 25 percent of the operating budget, 30 percent, or what is their target. Mr. Smith clarified this is the purpose of the “rainy day” fund that some cities establish. Mrs. Hammond stated some of our notes are relatively small amounts and questioned if there would be any merit to having a process where we start paying some of the smaller amounts off instead of rolling them over. Mrs. Fersch stated we try to show something paid on each one and the Municipal Building Fund is being paid with impact fees, so that will be done within the next couple of years and our water tower is being paid off this year. Mr. Schwallie stated what has been done over the years are that they are all combined into one jumbo note issue, so you can have relatively small amounts for a given project but still get the efficiency of a large sale. Mr. Wisniewski clarified that the water plant, sewer plant, wastewater plant engineering, are all self-funding from their various funds. Mr. Schwallie stated the City historically has been able to pay off its utility debt very fast just from shear growth and capacity fees. Mr. Fix clarified the water and sewer debt are paid by utility fees, street improvement, traffic control, police facility, and Center Street notes are paid by income tax, and impact fees are used for the municipal building. Mr. Fix further stated the SIB loan is being paid by impact fees this year, and one-half of the police lease is paid by impact fees and the other half from general fund. Mr. Schwallie stated unlike a private business where you take money in and pay it out, in government you have each individual fund that funds its own projects. Mr. Schwallie stated he would be happy to come back to any meeting to answer any further questions. Mr. Wisniewski inquired if Mr. Schwallie had any recommendations for the Committee and Mr. Schwallie stated he does not want to see his clients over-extend themselves and the City has been very good about keeping an eye on that, and he would encourage Council to continue to do that.

Mr. Wisniewski stated his concern is we have an intersection that is failing, and as we improve in other areas, it will cause additional problems on that intersection. He stated we have the ability to improve the intersection now with a large infusion of cash from the State, however, it will cause us to borrow another $1.4 million, so if we do it now we are putting ourselves into further debt and if we don’t do it now we will be looking at three times the amount of debt in the future. Mr. Fix stated we can’t say it will cost us three times as much down the road, because we don’t know that. Mr. Schwallie stated it is up to Council to weigh the various factors and make the decisions. Mr. Hansley stated in the memo he and Mrs. Fersch jointly drafted regarding that intersection, they pointed out you would reduce your flexibility to deal with the unknown. Mr. Hansley stated their assessment was that the intersection was not all that bad and just because we have the ability to get a grant does not make that our number one priority. He stated there are likely other projects we would want to borrow for before we did this project. Mr. Hansley stated further we do not know the cost of the real estate purchase, we would need to buy it from three commercial businesses, and none of them want the project. He stated a borrowing would put us fairly close to a County imposed limit and that would reduce the flexibility to deal with a true emergency. Mr. Sabatino stated he felt Mr. Wisniewski’s point was that we knew we would have a five-lane fully improved road on line in two years which will feed more volume into a situation that has already been identified as having an issue. He stated if we do not take a look at doing something now, it’s going to further complicate the situation. Mr. Sabatino stated he understood how a borrowing might limit us in other areas, but he felt this body needs to have a discussion to determine where we want to go. Mrs. Hammond stated she agreed with Mr. Sabatino, however, that does not fall under Mr. Schwallie’s province. Mr. Sabatino stated he felt it did fall into the area of how this would impact our situation. Mrs. Hammond stated if there are no further questions for Mr. Schwallie she would like to thank him for attending this evening and answering everyone’s questions.

Finance Committee recessed at 9:05 P.M., and reconvened in open session at 9:15 P.M.

4. PERSONNEL DEPARTMENT:

A. Personnel Director’s Report. Mrs. Fersch stated she did not provide a written report, but she would answer any questions.

5. DEVELOPMENT DEPARTMENT:

A. Development Director’s Report. Mr. Hansley stated he had provided a written report and he would be happy to answer any questions. He stated he and Mayor O’Brien will meet with the Canal Winchester Mayor and their attorney to see if there is a possibility of settling the Thornton annexation issue. Mr. Fix clarified the flier regarding the sound walls and Diley Road would be included in the utility bills at the end of the month. Mr. Sabatino stated the flier was not going to be about sound walls only, but have information regarding the entire Diley Road project. Mr. Hansley stated he has not seen the final flier as yet and Mr. Fix stated he would like to have the flier sent to Council before it goes out so everyone would know what it contained. He stated he would like to know what is going out before he gets questions from his neighbors or whatever. Mr. Wisniewski stated the flier will be more of an information sheet only.

Mr. Sabatino stated he would like to discuss the Safety Grant and Mr. Hansley stated staff would like a decision one way or the other because everything is in limbo, including the Walgreen’s decision, and ODOT has not been informed of anything that is pending. They have not been told that we are not going to do the grant, but staff was recommending we not do the grant. Mr. Sabatino stated all of Council knows we have some issues with our borrowing, and this is something we need to evaluate and determine if we want to do it or not. Mrs. Hammond stated there are two issues, yes we can borrow the money, but if we do that does not leave us much wiggle room if we have something major come up. She stated further a decision needs to be made because we have someone developing land there and we are holding up the process by not making a decision. Mr. Hansley stated the biggest issue is that this is an unknown cost, our matching funds, is an unknown number mostly because of the cost of the acquisition of right-of-way. He stated McDonald’s, CVS, and BP gas station are all adversely affected by the proposed improvement and all of them would be selling us right-of-way at market value or higher plus the legal fees of acquiring it. He stated all of those costs are on the City and they are totally unknown. Mr. Hansley stated if we knew exactly what the cost out of our pocket was, he would be much more comfortable in figuring out how to pay for it, but we do not know what this project is going to cost. Mr. Hansley stated further we still feel pretty good about the Diley Road project, but it is still a moving target. There could be some change orders that will take us above the budgeted amount. Mr. Sabatino questioned if it was wise for us to have two potential situations at the same time. Mr. Hansley stated ODOT has indicated there is the possibility we could commit to the project, but see if it could be sold in 2012 instead of 2011. He stated that would delay it a bit. Mr. Sabatino stated by that time Diley Road would be complete and Mr. Wisniewski stated he would be thrilled if there was a way the project could be put off for a year. Mr. Hansley stated the real estate must be purchased first, and if we don’t get that done we would miss the first available construction season. Mr. Sabatino inquired how that interfaced with the development that is on the cusp now. Mr. Hansley stated once Council makes the decision to accept the grant, then the Walgreen’s thing falls into place. He stated right now they have designed it assuming the safety grant, and once staff knows Council’s decision we can sit down with Walgreen’s and move ahead. Mr. Sabatino stated given what Mr. Hansley knows about the situation, what is his recommendation to Council that would be the prudent thing for the City to do. Mr. Hansley stated it was a tough decision, but he would recommend not accepting the grant. He stated this recommendation considers the fact that we did not receive the Ohio Public Works Commission Issue II funds of $500,000 we applied for, the fact that the real estate acquisition was never figured into the budget and is an unknown figure, and he did not feel this project was our most pressing concern. Mr. Sabatino stated then Mr. Hansley felt it would be prudent to pass on this grant and then once we known where we are on Diley if we still have an interest and ODOT still has an interest, look at this project then. Mr. Hansley stated the key is letting ODOT know exactly why we are turning it down, it is not an ill conceived project, that our budget came up tighter than we thought, we didn’t get the Issue II funds, we have a little fear about the right-of-way acquisition; let them know all of the reasons we are turning it down. Mr. Sabatino inquired what Mr. Hansley wanted from Council in order to move on. Mr. Hansley stated he would like a motion to say whether Council would accept the grant or not accept the grant. Mr. Sabatino moved to accept Mr. Hansley’s recommendation to not move forward with the Safety Grant for the S.R. 256/Refugee Road intersection at this time due to our financial situation and it be re-evaluated at a later time; Mr. Smith seconded the motion. Mrs. Hammond clarified this motion was that the City not accept the grant. Mayor O’Brien questioned what position this put us in with Walgreen’s in the future, would we have to go back and buy property from them. Mr. Hansley stated we would try to find the best compromise. Mayor O’Brien stated right-of-way is one thing, curb cuts are another, and that development has two signalized access points and he cannot believe they need curb cuts that close to that intersection. He stated we have the opportunity to close them, the establishments are closed, and the curb cuts should be closed. Mayor O’Brien stated one of the reasons for putting in the Windmiller signal was to spur development on the other site. Mr. Hansley stated you can’t close the curb cut without compensating them. Mr. Hansley stated he understood the frustration, but just because the store was closed, did not mean they did not have an existing curb cut they were entitled to use. Roll call was taken with Mr. Smith, Mr. Wisniewski, Mr. Fix, Mrs. Sanders, Mrs. Hammond, Mr. Sauer, and Mr. Sabatino voting “Yea.” Motion passed, 7-0.

6. CHAIRMAN: Mrs. Hammond stated she had nothing to bring forward this evening.

7. OTHER BUSINESS:

A. Township Trustees Meeting – Update. Mrs. Hammond stated the Trustees are meeting this evening, and she did attend the meeting last month. She stated at that meeting the Trustees presented proclamations to two high school students. She stated the individual from Pickerington Central is Katherine O’Brien and both of these students will be going on to a military academy.

B. Pickerington Local School District Board Meeting – Update. Mrs. Sanders stated she did attend the School Board meeting and they had a lengthy agenda. She stated they were mainly focused right now on the testing that is coming up. She stated the Township made a donation to the levy campaign and she had spoken to the Board members and let them know she would be Council’s liaison if they needed anything.

C. Review and discussion regarding Finance subcommittees. Mrs. Hammond stated as everyone is aware we have some budget issues that need to be addressed in a timely fashion, and if we would want to put something on the ballot in November, we would have to be ready by August. Mrs. Hammond stated she would like to divide Finance into two subcommittees, one looking at income and one looking at expenses. Mr. Sabatino, Mr. Fix, and Mr. Sauer stated they would be on the expense subcommittee and Mrs. Sanders, Mr. Smith, and Mr. Wisniewski would be on the income subcommittee. Mrs. Hammond stated she would float between the two subcommittees. Mayor O’Brien stated it has been suggested to consider convening a citizens committee because of the success of the Utility Fees Review Commission and the fact that by gauging the residents in the process it might be an easier sell if a hard decision has to be made. Mr. Wisniewski stated he felt Council was elected to make these decisions and the responsibility sits upon their shoulders. He stated he felt Council should accept the responsibility for making the decision to raise income taxes if that is what decision is made. Mr. Sabatino and Mr. Fix stated they concurred with Mr. Wisniewski. Mr. Fix stated he found the Utility Fees Review Commission to be inefficient because it seemed to take quite a lot of time to get something done. He stated he meant no offense to any member of that Commission, it was just that it took so long to get everyone versed on the issues. Mr. Sabatino stated he did not feel there was enough time to get citizens up to speed on all of the issues on something that is as time sensitive as this is. Mrs. Hammond stated despite the fact that no-one wants to, raising taxes in some form may be the only option. Mr. Fix stated that was correct, and as Mr. Wisniewski had stated he would rather it be Council, who was elected to make those decisions, rather than a citizen who just filled out a volunteer application. Mr. Sauer stated he would like to see a citizen added to each side of this so Council could get the viewpoint from someone who is not elected as a different perspective. Mr. Smith stated the problem would be which constituency the citizen should be from, from seniors, from single mothers, etc. Mr. Smith stated he agreed the responsibility for a decision is Council’s. Mr. Sabatino stated before a decision is made, Council needs to look at both sides of the issue, and the sooner they get started the better.

Mrs. Hammond stated it appeared it would be best for the two subcommittees to meet immediately following the regular monthly Finance Committee meeting. Mrs. Hammond stated in order to allow maximum time for the subcommittees, she would recommend Finance Committee meeting begin at 7:00 P.M., with the subcommittees convening immediately at the conclusion of the regular meeting. Mr. Fix moved, until further notice, to schedule the regular Finance Committee for the third Wednesday of each month at 7:00 P.M., with the expense and income subcommittees meeting immediately following the regular meeting until further notice; Mr. Sauer seconded the motion. Mrs. Hammond, Mr. Sauer, Mr. Sabatino, Mr. Smith, Mr. Fix, Mr. Wisniewski, and Mrs. Sanders voted “Aye.” Motion carried, 7-0.

8. MOTIONS:

A. Motion for Executive Session under Section 121.22(G)(1)b, Matters involving an employee’s or public official’s employment, Section 121.22(G)(2), Purchase or sale of public property, Section 121.22(G)(3), Conference with law director regarding pending or imminent court action, and Section 121.22(G)(4), Matters involving bargaining sessions with public employees. Mrs. Hammond stated the Executive Session was not necessary this evening.

9. ADJOURNMENT. There being nothing further, Mr. Smith moved to adjourn; Mr. Wisniewski seconded the motion. Roll call was taken with Mrs. Hammond, Mr. Smith, Mr. Fix, Mr. Sabatino, Mr. Wisniewski Mr. Sauer, and Mrs. Sanders voting "Aye." Motion carried, 7-0. The Finance Committee adjourned at 10:00 P.M., February 20, 2008.

RESPECTFULLY SUBMITTED:

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Lynda D. Yartin, Municipal Clerk