CITY OF PICKERINGTON

FINANCE COMMITTEE OF COUNCIL

CITY HALL, 100 LOCKVILL ROAD

WEDNESDAY, JUNE 11, 2008

SPECIAL MEETING

1. Mrs. Hammond called the Special Finance Committee of Council to order at 7:30 p.m., with roll call as follows: Mrs. Sanders, Mrs. Hammond, Mr. Smith, Mr. Wisniewski, Mr. Sabatino, Mr. Sauer and Mr. Fix were present. There were no members absent. Others present were Mitch Banschefsky, Linda Fersch, Tim Hansley, Ted Hackworth, Larry Jones, Jim Woods, Stacey Bashore, and others.

2. SCHEDULE MATTERS

A. Review and request for motion to approve draft ordinance amending Section 882.03 of the Pickerington Codified Ordinances to increase the income tax rate from one percent (1%) to two (2%) per annum and to place this amendment before the electors at the General Election on November 4, 2008, Mr. Wisniewski moved to approve and forward to Council; Mr. Fix seconded the motion. Mr. Sabatino stated he would like to offer an alternative that would put the tax and the credit on the ballot and that it will not change the credit for five years. He stated that he didn't feel there was a perfect solution, but this was something that he tried to come up with to deal with the concerns. Mr. Smith clarified that the credit would remain the same and asked what would happen after five years and Mr. Sabatino stated that the Council would have the right to change it. Mr. Banschefsky stated he was covering the meeting for Phil Hartmann and stated he drafted the legislation as requested by Mr. Sabatino. He stated that moving the credit language from a free standing ordinance into the income tax ordinance accomplishes putting everything in one Ordinance so it wouldn’t necessitate going back to the ballot to change it. Mr. Banschefsky stated that the real issue is the law says that one Council cannot bind the hands of subsequent Councils. He stated that if after the five year period a subsequent Council decided they wanted to change the credit it could be done, but the odds are low that would happen since the history shows the credit hasn't been adjusted. Mr. Banschefsky stated that the Ohio Revised Code only requires that the Income Tax goes on the ballot, so if you are only changing the credit it does not have to go on the ballot unless there is a charter provision that would say that. Mr. Wisniewski asked if this was non binding as leaving the ordinances separate and Mr. Banschefsky stated that legally that is true. Mr. Wisniewski stated that is why he thinks the ordinances should be kept separate, because he felt that it confuses the ballot language because it gives the impression that after five years that it would be changed. Mr. Sabatino stated that the idea was to make it easier to pass by including the credit in terms of giving the potential voters the confirmation of five years with no credit changes. He stated that his concern was to make it as easy as possible to pass and to make it voter friendly. Mr. Smith stated the Income Subcommittee discussed both approaches and we felt that the easiest way would be to separate them and have it codified in an ordinance. Mr. Wisniewski stated that if you pay income tax somewhere else you will not be paying anymore so there is nothing to read into it from the ballot language and people will want it to be as simple and straightforward as possible. Mr. Smith stated that once it is in ordinance form it is over and is a reality, so we can say that Council has already taken an action on the credit. Mr. Fix stated he spoke with Mr. Hackworth and he is of the belief that the numbers may be better for us than the projections we have received and it has been suggested that we could afford a 100% credit. He further stated that we need to make it easily understandable and he is confident that we can help the voters make an informed decision. Mr. Sabatino stated that another possible consideration would be to just put the income tax question on the ballot and then stating in the credit ordinance that we do not intend to change it for five years. Mr. Fix stated he felt that was reasonable. Mr. Sabatino stated we are trying to make it as easy as possible to understand. Mr. Wisniewski stated it was troublesome to him that someone would think the credit was only for five years because no matter what time frame you put on it that there is going to be some confusion. Mr. Sabatino suggested moving forward the original proposal as is on the basis that we state that the credit would not change for five years. Mr. Wisniewski stated that there will still be some confusion if this is reported in the papers that there is a five year limitation even if it is a separate ordinance. He stated that the income tax has not been changed since 1976 and there were no time frames on it then. Mrs. Hammond stated she has worked at the polls before and quite frankly a lot of people don't read the issues until the day they vote, so whatever is put in needs to be straightforward and easy to understand. Mr. Hackworth suggested dropping the time frame and simply state that it is to raise it from 1% to 2% and the credit going to increase from 50% to whatever the numbers are and leave the dates off. Mr. Smith clarified that we want to separate them so the credit will be over and done with so we could show the voters it has been done. Mr. Sauer asked for clarification on what the estimated credit for last year and Mrs. Fersch stated the credit we gave last year was $1.3 million. Mr. Sauer asked if there was a typical growth rate estimate for the credit and Mrs. Fersch stated that we would. Mrs. Fersch explained that you would take the businesses that are in the city for the City withholding and it would also be the subcontractors that work in the City. Mr. Sabatino stated that what doesn't make sense to him is whatever our net number is now if we back off the 1/2% credit which we are currently giving then that would give us the net proceeds of a 1% income tax. He further stated that it has been suggested that we could give 100% tax credit and still end up about where we would end up with this increase. Mrs. Fersch stated that part of the money coming in now is based off of a 1/2% figure. She stated we have shown what the result would be if we gave a 100% credit and if we did that it wouldn't generate any more money. Mr. Smith stated that these are the same questions that the Income Subcommittee asked and got educated on the various options and we feel what we recommended is the best approach. Mr. Wisniewski stated that if there is an error in the numbers we can go through them at Finance Committee and can review everything then. He stated that we shouldn’t pass the credit out tonight so we can discuss it at Finance. Mr. Smith clarified that the alternative Mr. Sabatino offered was for discussion only. Mrs. Sanders stated she felt that after all the ideas she has heard she felt this was the best compromise. Mr. Sauer stated he appreciated Mr. Wisniewski's suggestion of waiting to work on the credit until Finance Committee. Mrs. Hammond clarified that Items A and C are related and need to move forward at the same time and that Item B be held off until the Finance Committee on June 18th. Mr. Sabatino stated it was his observation that Items A and C are more time sensitive than Item B and he would like to see some more review of what Mr. Hackworth has proposed. Mrs. Hammond requested that if anyone has anything different to put on the table that it be given to everyone before the meeting. Roll call was taken with Mrs. Hammond, Mrs. Sanders, Mr. Smith, Mr. Wisniewski, Mr. Fix, Mr. Sabatino and Mr. Sauer voting "Yea." Motion passed, 7-0.

B. Review and request for motion to approve draft ordinance amending Section 882.17 of the Pickerington Codified Ordinances to provide a one hundred percent (100%) credit on the first one and one-half percent (1.5%) of income taxes paid to another municipality for the income tax liability incurred under Chapter 882, from a fifty percent (50%) credit on the lower of the two applicable tax rates on the income taxes paid to another municipality. Mrs. Hammond clarified that this item would be discussed at the Finance Committee on June 18th.

C. Review and request for motion to approve draft resolution to place the issue of increasing the municipal income tax by one percent (1%) per annum as provided by Ordinance No. _______________, on the ballot at the General Election on November 4, 2008, and directing the Boards of Election for Fairfield and Franklin Counties to conduct such elections. Mr. Smith moved to approve and forward to Council; Mr. Sauer seconded the motion. Roll call was taken with Mr. Wisniewski, Mr. Smith, Mrs. Sanders, Mrs. Hammond, Mr. Sauer, Mr. Fix and Mr. Sabatino voting "Yea." Motion passed, 7-0.

3. ADJOURNMENT

There being nothing further the Finance Committee Special Meeting adjourned at 8:02 p.m. on, June 11, 2008.

RESPECTFULLY SUBMITTED:

Stacey L. Bashore, Deputy Municipal Clerk