WEDNESDAY, JUNE 18, 2008

REGULAR MEETING

7:00 P.M.

1. ROLL CALL. Mrs. Hammond called the meeting to order at 7:00 P.M., with roll call as follows: Mr. Sabatino, Mrs. Hammond, Mr. Smith, Mr. Fix, Mr. Sauer, and Mrs. Sanders present. Mr. Wisniewski arrived at 8:00 P.M. No members were absent. Others present were Mayor O’Brien, Tim Hansley, Lynda Yartin, Linda Fersch, Chris Schornack, Steve Carr, Larry Jones, and others.

2. APPROVAL OF MINUTES OF May 21, 2008, Regular Meeting. Mr. Fix moved to approve; Mr. Sabatino seconded the motion. Roll call was taken with Mrs. Hammond, Mr. Fix, Mr. Sabatino, Mr. Smith, Mr. Sauer, and Mrs. Sanders voting “Yea.” Motion passed, 6-0.

3. SUBCOMMITTEE REPORT:

A. Expense Subcommittee. Mr. Fix stated the subcommittee met on June 4^th and moved the contract proposal from RITA for income tax to the full Finance Committee. He stated, however, Mrs. Yartin was on vacation and that item was not included in the Finance packet and was not included on tonight’s agenda. Mr. Fix stated in fairness to all the Committee members who did not attend the subcommittee meeting he would request that be included on the next Finance agenda. Mr. Fix stated the subcommittee had also reviewed the budgets of the Development and Planning and Zoning Divisions, and he would be happy to answer any questions. Mr. Fix stated the subcommittee will meet immediately following this meeting and will review the budgets of the Mayor, Council, Manager, Municipal Clerk, and Parks and Recreation Departments.

4. FINANCE DEPARTMENT.

A. Finance Director’s Report. Mrs. Fersch stated she had provided a written report to the Committee and she would be happy to answer any questions. Mrs. Fersch stated with regard to the Aquatic Fund, she had received a report from the Chief of Local Government Services and it is their opinion this must be treated as an Enterprise Fund or we must put it as a subdivision in the General Fund. Mrs. Fersch stated she would recommend we treat this as an Enterprise Fund because any monies we make as a profit will probably go back into the pool or to expand for capital improvements. She stated once it is an Enterprise Fund you cannot transfer the funds to any other fund to do anything else with, and as everyone wanted to make sure that General Fund monies are not used for the pool, once it is put into the General Fund it is very difficult to separate it out or to keep track of each year’s balances. Mr. Sabatino moved to approve the Aquatic Fund as an Enterprise Fund; Mr. Sauer seconded the motion.

Mr. Hansley stated while discussing the pool he would ask Mr. Carr to provide the Committee with an update on the revenue versus expenditures on the pool. Mr. Carr stated to date, and this does not include concession revenue, we have taken in $217,000. He stated we have sold 672 passes, three passes were done on a trade out with contractors who reduced their bill by the cost of a family pass, and with the 40 passes the previous owners sold in the fall, we have 715 passes. Mr. Carr stated the expenses that were budgeted totaled $184,000, and again that does not include concession revenue. Mr. Carr further stated according to the records of the previous owners, 27 percent of their membership was City of Pickerington residents and this year our total membership is 42 percent City of Pickerington residents.

Roll call was taken with Mr. Sauer, Mr. Fix, Mrs. Sanders, Mrs. Hammond, Mr. Smith, and Mr. Sabatino voting “Yea.” Motion passed, 6-0.

B. Review and request for motion to approve draft ordinance amending the 2008 appropriation, Ordinance 2007-85. Mrs. Fersch stated she had submitted a draft appropriation ordinance to the Committee for review. She stated she was requesting an increase in General Fund Miscellaneous General Government Contractual Services of $12,426.89 for prosecutor services for Elderly Protective Services and $6,426.89 for 2007 election expenses. She further stated she was requesting an increase of $39,511.14 under Water Capital Improvement Transfers/Reimbursements for the County relocating the force main in front of Max and Erma’s. Mrs. Fersch also stated under Sewer Repair & Replacement, she was requesting an increase of $33,920 under Capital for the Stilson project management of the wastewater treatment plant. Mrs. Hammond moved to approve and forward to Council; Mr. Smith seconded the motion. Roll call was taken with Mrs. Sanders, Mr. Sauer, Mrs. Hammond, Mr. Sabatino, Mr. Fix, and Mr. Smith voting “Yea.” Motion passed, 6-0.

5. PERSONNEL DEPARTMENT:

A. Personnel Director’s Report. Mrs. Fersch stated she had provided a written report, and she would answer any questions.

6. CHAIRMAN:

A. Review and discussion regarding Ordinance 2000-139, “An ordinance to reimburse Violet Township for Road and Bridge Levy Revenues lost upon land being annexed into the City of Pickerington” Mrs. Hammond stated she would like to carry this item on the agenda for the next meeting. Mrs. Hammond stated she had requested this be placed on the agenda for discussion only. Mr. Sabatino stated the intent of this was to compensate the Township for not objecting to annexations and typically it was for ten years. He stated a few years ago, the former Mayor proposed to give the Township not only the Road and Bridge Levy but also $20 for every car within the 300 and some acres, and $100 for every business in that area and to do it forever. Mr. Sabatino stated he had spoken to the law director regarding binding future councils and it was his opinion this could be overturned. Mr. Fix clarified that we have sent close to $52,000 to the Township from 2001 through 2007. Mr. Fix stated in 2007 we spent about $20,000 and Mrs. Fersch stated in 2008 it will be a little more because Spring Creek is starting to build out. Mrs. Fersch stated she did not know how this affected the annexation of our water plant. Mr. Fix further clarified that Ordinance 2000-139 and the Spring Creek area were two separate issues. Mrs. Fersch stated Ordinance 2000-139 will expire after ten years, and the Spring Creek area runs forever. Mr. Fix stated then last year the total paid to the Township for the properties covered by Ordinance 2000-139 was about $5,500. He stated if this expires in three years, he questioned why we would have the conversation about that property, and the conversation should be about Spring Creek. Mr. Sabatino stated he agreed with Mr. Fix and if our deal was for ten years, it was done in good faith, and they did not object, we should live up to our end of it. Mr. Sabatino stated he felt Spring Creek was another story. Mayor O’Brien stated with the changes in the annexation laws, it might be a good idea to have our law director research this issue. Mr. Fix stated it was his opinion that we should spend the time looking at the Spring Creek area because last year we paid approximately $13,000 and it has grown by over $1,500 per year, and if that is a forever deal, he felt we should be looking at that. Mr. Sabatino stated he concurred with Mr. Fix that the area to be concerned about was the Spring Creek area. Mrs. Sanders stated she did feel we should have Mr. Hartmann look at the first issue so when the ten years expire we would know exactly where we stand with the new laws so we don’t get into another agreement like this. Mrs. Fersch stated with the properties in Ordinance 2000-139, the value is based on the value of the property at the time it was annexed. She stated with Spring Creek as the valuations go up, the cost goes up. Mrs. Hammond stated then she understood it was the consensus of the Committee that they did not wish to address Ordinance 2000-139, but would like to look at the Spring Creek agreement. Mr. Sauer stated he felt that would be the wisest choice. Mr. Smith inquired if we could ask Mr. Hartmann to attend the next Finance Committee meeting and provide an overview of this agreement. Mrs. Hammond stated she would ask this be put on the next agenda and the Spring Creek agreement be included in the next Finance Committee packets and Mr. Hartmann be invited to attend that meeting.

7. OTHER BUSINESS:

A. Township Trustees Meeting – Update. Mayor O’Brien stated he had attended the meeting and it was a fairly light agenda.

B. Pickerington Local School District Board Meeting – Update. Mrs. Sanders stated there were no major issues discussed at the last meeting.

Mrs. Hammond stated the next item for discussion is what Council would like to do with the credit portion of the income tax. She stated we currently have a one percent income tax with a one-half percent credit. The ordinance that did not move on last week proposed a two percent income tax with a one and one-half percent credit, which meant that residents who worked outside of the City of Pickerington would continue to pay the same amount they are currently paying. Mr. Sauer stated he would like to verify that on the chart provided to the Committee for revenue enhancement proposals (Full Credit), the $1,471,781.07 is a legitimate figure. Mr. Sabatino stated he had requested Mrs. Fersch and Mr. Schornack look at doing a 1.5 percent tax with a possible reduction in the amount that people that work outside the City to dropping it to .25 percent and that was based upon looking at the form they received in their packet that presented things in a different light than it actually was because it did not state that one of the columns was figured at a 1.5 percent credit which made it a little confusing. Mr. Sabatino stated he thought the two the Committee had were the closest to reality that we have at this point in time. Mrs. Fersch stated she had also provided a listing of our current debt issues, and a scenario of what we would be making in payments.

Mr. Fix stated in the ordinance that had been considered in the past weeks was at a two percent tax with at least a 1.5 percent credit, would provide $2.88 million in collections. Mr. Fix stated with a 1.75 percent credit, someone who works in Columbus, would be paying the City less taxes. He stated as a voter if he did not have to pay any more taxes and the City would raise revenue he would be all for it. He stated he did not know why we would want to consider giving a decrease when we have roughly $17 million in debt for a city the size of 14,500 people, that is a lot of debt. He stated six more police officers would cost $250,000 a year, and we need $500,000 to pave streets that we cannot afford to do now. Mr. Fix stated given the fact that we have $17 million in debt, that we have not paved streets in four or five years, that we are short on police officers, and that there is a lot of investment opportunity to build more roads and do other investments that will develop our community over time, and given the fact that the voters are going to vote in favor of this in large numbers if there is no personal increase in their taxes, why would we not go for the two percent tax with a 1.5 percent credit and raise roughly $2.9 million dollars. Mr. Sauer stated from his point of view the last five years our increase in income tax received has been about $1.1 million. He stated the economy is going to get better, it always has, and at the last meeting he had asked what amount we would need to feel comfortable with, and he was told roughly $1 million. Mr. Sauer stated that given that, he thought Council was taking a responsible action by actually doing a reduction to the individuals that are paying some of the tax, we would still be able to pay down some of our debt, keeping the low interest rate with the Diley Road payments, and we would be able to pave the roads. He stated further we are looking to going to a more business community which means the income tax revenues are going to increase over time and he did not think we would sit here and be stagnant over the next ten years either. Mrs. Hammond stated she agreed we may not be stagnant, but no matter how much the economy improves, our expenses are still going to increase. They are never going to turn around and go down. Mrs. Sanders stated what she would hate would be to give the residents a decrease and then in a couple of years have to go back and take it back. Mrs. Sanders stated since this is not increasing their taxes, she felt this would pass. Mr. Smith stated he would love to be in a position in three years to offer a rebate, but he does not have a crystal ball and there are to many variables and to many unknowns. Mr. Smith stated the advantage of putting this credit in an ordinance, if we find ourselves in that situation where our income tax revenues are up, we can by a simple ordinance raise the credit. Mrs. Sanders stated she concurred, that by doing the credit by ordinance it gave the Council some flexibility. Mr. Smith stated with this ordinance it narrows down to the residents exactly where Council is and it takes all of the unknowns and uncertainty out of an income tax increase for the vast majority of the residents of the city who work in another taxing district that their taxes are not going to go up. He stated we can definitively say that. Mr. Fix stated in three years he would hate to go to the voters with another police property tax levy, and he felt if things change or these numbers don’t come in as they are projected, and these are just projections, because no one knows what will happen, he would hate to have to back on the ballot for more property taxes. Mr. Fix stated he would hate to be in that position when we have the opportunity today to put before the voters an opportunity to say they don’t have to pay more taxes and yet the city will raise revenues. Mr. Fix stated he is not a tax and spend person, but when we have this kind of debt, we have roads that are beyond repair in some situations, and we don’t have enough police officers on the street, he could not see passing up this opportunity to give the voters the chance to have their say. Mr. Sabatino stated he concurred with some of the analogies, but he thought they were dealing with wants and needs instead of just needs. He stated if we would go with a 1.5 percent increase instead of two percent, leave the credit where it is, and that would give us $1.442 million next year and he felt that would be more honest with the people about what the actual needs were. Mr. Sabatino stated he thought going for a 1.5 percent would give show the residents Council was truly looking out for their best interests. Mayor O’Brien stated he felt duty bound to put the City in the best financial position we are capable of and he felt sticking with the original plan is the most responsible position. Mayor O’Brien stated he felt it would be evident to the taxpayers what they are getting for their money, whether it is sidewalks, street improvements, etc. Mrs. Hammond further stated with our debt, if we have extra money we are permitted to pay more on some of the debt so we can pay off the debt as soon as possible. Mr. Fix stated if Council can get this passed, and he believed they could, he felt it was irresponsible not to. Mr. Smith stated in talking to people, the thing that always comes up is the tax imbalance that we have here in our area. He stated it comes from school tax, income tax, and property tax. He continued if we had the additional revenue where we could set up a fund to encourage the right kind of planned development it would go a long way to more balance it. Mr. Smith moved to reintroduce to Council the ordinance at a two percent income tax with as much as a one and one-half percent credit for people who work in other taxing districts; Mr. Fix seconded the motion. Mrs. Hammond stated she does not feel there is a solution that will make everyone 100 percent happy, but with the debts that we have, with the future capital improvement projects we may have coming up, the Diley Road project, that at this time that is the best route to take. Mr. Sabatino stated he felt making the tax 1.5 percent instead of two percent would cover the needs that we have and he felt going to two percent was a mistake. Roll call was taken with Mr. Sabatino and Mr. Sauer voting “Nay,” and Mrs. Hammond, Mr. Fix, Mr. Smith, Mrs. Sanders, and Mr. Wisniewski voting “Yea.” Motion passed, 5-2.

9. 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.

10. ADJOURNMENT. There being nothing further, Mr. Fix moved to adjourn; Mr. Smith seconded the motion. Mrs. Hammond, Mr. Sauer, Mr. Sabatino, Mr. Smith, Mr. Fix, Mr. Wisniewski, and Mrs. Sanders voted "Aye." Motion carried, 7-0. The Finance Committee adjourned at 8:05 P.M., June 18, 2008.

RESPECTFULLY SUBMITTED:

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Lynda D. Yartin, Municipal Clerk